–House Majority Leader Says Tax Issue ‘Must Be Resolved’
–If Tax Issue Resolved, Can Move Ahead With Spending Cuts

By John Shaw

WASHINGTON (MNI) – House Majority Leader Eric Cantor said Thursday
he is leaving the budget talks led by Vice President Biden, saying there
is an “impasse” on the question of whether additional taxes should be
part of the negotiations.

In a statement, Cantor said this impasse on taxes must be dealt
with before he can participate in the budget talks. This seems to
contradict comments he made Wednesday evening when he said the talks had
been extended, indicating progress was being made.

“This tax issue must be resolved before discussions can continue,”
Cantor said.

Cantor called on President Obama to “speak clearly and resolve the
tax issue.”

Democrats in the budget talks have said that additional revenues
should be part of the discussion. Republicans, led by Cantor, said tax
increases should not be part of the discussion.

Cantor has said the focus of the talks should be on assembling
“trillions” in spending cuts.

In his statement, Cantor seemed to signal that if Democrats remove
taxes from the talks, he could rejoin the negotiations.

“Once resolved, we have a blueprint to move forward to trillions of
spending cuts and binding mechanisms to change the way things are done
around here,” Cantor said.

Cantor’s move is surprising given his comments Wednesday evening as
he left the Capitol about 6:00 p.m., when he said additional talks led
by Biden had been scheduled for Thursday and possibly Friday, which he
said indicated progress was being made.

The Biden group met Tuesday and Wednesday and is scheduled to meet
Thursday at 2:00 p.m. and possibly Friday.

The talks are seeking a deficit reduction package that can be
developed to coincide with this summer’s vote on debt ceiling
legislation.

The talks are focused on assembling a package of spending cuts that
would allow Congress to consider a debt ceiling increase sufficiently
large to extend until after the 2012 November elections.

Various lawmakers and administration officials have put this number
at $2.4 trillion — for both the size of the debt ceiling increase and
the accompanying spending cuts.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Tim Geithner has said that Congress must pass
legislation increasing the debt ceiling by August 2.

Biden has been negotiating with Cantor, Senate Minority Whip Jon
Kyl, Senate Appropriations Committee Chairman Dan Inouye, Baucus,
Assistant House Minority Leader Jim Clyburn and Van Hollen, the top
Democrat on the House Budget Committee.

The administration is represented by Biden, Treasury Secretary Tim
Geithner, White House budget director Jack Lew and the director of the
National Economic Council Gene Sperling.

** Market News International Washington Bureau: (202) 371-2121 **

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