President Obama, shown returning to Washington, will hold separate talks… (Jason Reed, Reuters )
Reporting from Washington — When House Speaker John A. Boehner tapped Rep. Eric Cantor to lead the GOP in White House talks to reach a deficit reduction deal, he gave the Virginia lawmaker a chance to shine as a potential future speaker.
But Cantor's sudden, stormy departure from the meetings this week, citing an impasse with Democrats over taxes, helped solidify his position as a champion of the conservative right rather than as a negotiator who could achieve a budget compromise.
Now, President Obama, Boehner and Senate leaders must resolve the standoff by striking a deal to raise the nation's borrowing limit before a threatened government default in August.
That puts Obama and the top congressional leadership in the same position as in April, when they narrowly averted a government shutdown. The stakes this time are substantially higher. Failure to increase the $14.3-trillion debt limit by Aug. 2 could produce economic disruptions including a costly rise in interest rates and borrowing.
Negotiations are expected to resume next week. On Monday, Obama will meet in separate sessions with Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.).
It was always understood that Obama and Boehner would negotiate the final deal. But after seven weeks of closed-door talks headed by Vice President Joe Biden, Cantor's sudden decision to drop out was striking.
Cantor, who as majority leader is the No. 2 Republican in the House, told Boehner of his decision just before the public announcement.
The role of chief House Republican negotiator was a high-profile one, providing an opportunity for Cantor to show he was a measured deal-maker and more than a brainy advocate of the conservative right.
Biden had expressed surprise at the progress the two were making.
"He's smart as hell," Biden said, unsolicited, last week. "I've really enjoyed working with Eric Cantor. For real."
But once the debt talks entered the difficult phase — "my bicycle for your golf clubs," as Biden put it — Cantor decided not to risk the political fallout from a compromise on taxes.
Conservatives grumbled a few months ago when Boehner stepped in to negotiate a 2011 spending package with Obama to prevent the government shutdown. Critics on the right called the speaker's effort inadequate, underscoring the difficulty of compromise on the debt ceiling.
"Republicans were never going to go for raising taxes, and it finally is obvious to the White House just how difficult it will be to negotiate from that base line with Boehner," said Republican strategist Ron Bonjean. "But it can be done."
The two sides made progress over seven weeks of talks, identifying more than $1 trillion in savings, largely through cuts in agricultural subsidies, federal employee benefits and domestic programs.
Yet the deadlock over taxes is a major obstacle. Fueled by an aggressive conservative majority in the House, the GOP is demanding that new borrowing be matched dollar-for-dollar by spending reductions.
"What we've seen on the Republican side is all take and no give," said Rep. Chris Van Hollen of Maryland, a negotiator for House Democrats. A change in tack, he said, is "what's going to be required to achieve the 'adult' moment."
Democrats argue that deficits should not be attacked by spending cuts alone, and they pushed onto the table tax breaks and credits that could be eliminated or reduced to boost federal revenue, including those for the oil and gas industry and for corporate jets.
Democrats also suggested that individual income tax deductions be limited for couples earning at least $500,000. That could affect 1.3 million filers, they said.
Democrats notably steered away from one big-ticket tax issue: returning upper-income tax rates to levels before cuts enacted under President George W. Bush.