Attempting to revive stalled debates on increasing the debt limit, President Obama on Friday invited Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) to meet with him and Vice President Joe Biden in separate meetings on Monday. The invitation came after the two Republicans on Biden's debt panel, House Majority Leader Eric Cantor (Va.) and Sen. John Kyl (Ariz.), withdrew from negotiations on Thursday.
Cantor initiated the pullout from negotiations after Democrats refused to take tax increases off the table as part of a debt reduction package. On his blog this morning, a Cantor staffer wrote, “Yesterday, the debt limit negotiations were stalled because Democrats continue to insist that any agreement must include raising taxes. As Leader Cantor has made clear, tax increases cannot pass the House, and raising taxes is exactly the wrong move in this tough economic climate.”
Echoing this position, House Speaker John Boehner (R-Ohio) said in a statement on Friday that any debt increase must not include tax hikes, include spending cuts that exceed the amount of the debt limit increase, and include budget reforms that limit future spending, in order to pass the House.
“If the president and his allies want the debt limit increased, it is only going to happen via a measure that meets these tests,” according to Boehner.
In a conference call with reporters on Friday, two of the top budget negotiators for Democrats, Sen. Chuck Schumer (N.Y.) and Rep. Chris Van Hollen (Md.), argued that negotiations stalled due to the Republicans’ insistence on preserving tax cuts for the wealthy and reforming Medicare.
“There was just a lack of political will by the Republicans to accept the kind of compromise that was taking shape. A deal was potentially forming and Leader Cantor didn’t want his fingerprints on it,” said Schumer.
Reid seemed disappointed that he is now expected to play a more direct role in the budget negotiations. “With what Kyl and Cantor’s done, I think it's in the hands of the speaker and the president and sadly, probably me,” he said on Thursday.
As part of Republican plans to reform future government spending, Cantor announced Thursday that the House will vote on a balanced budget amendment the week of July 25.
Sen. Jim DeMint (R-S.C.), in an interview with ABC News, warned fellow Republicans that a vote in favor of a debt limit increase without a vote in favor of a balance budget amendment would harm their party and their chances at reelection.
“Based on what I can see around the country, not only are those individuals gone, but I would suspect the Republican Party would be set back many years,” said DeMint.
The Congressional Budget Office issued a report on Wednesday that highlighted the nation's debt problems. The report forecast that the national debt will exceed the size of the entire U.S. economy by 2021, if expected changes are made to current fiscal policy. Those expected changes included extension of the 2001 Bush tax cuts, reducing the number of households affected by the Alternative Minimum Tax, and revoking the reductions in Medicare payments to doctors that were part of the 2010 Affordable Health Care Act.
The Family Research Council, one of the top groups in Washington representing social conservatives, also voiced concerns about the nation's debt in a webcast on Thursday night.
“It's a bipartisan problem. The addiction to higher spending and more government has not been limited to simply one party. Washington has been and remains irresponsible with our tax dollars,” said FRC President Tony Perkins.
FRC supports a plan, dubbed “Cut, Cap, and Balance,” that seeks to cut deficit spending, place a cap on spending, and balance the budget. The webcast included DeMint, Sen. Orrin Hatch (R-Utah), Rep. Jim Jordan (R-Ohio), and Rep. Joe Walsh (R-Ill.).
The national debt currently stands at more than $14 trillion. Treasury Secretary Timothy Geitner has warned that the debt ceiling needs to be raised by August 2 to prevent a default on the nation's debt obligations.