(CNSNews.com) – House Majority Leader Eric Cantor (R-Va.) said that President Barack Obama torpedoed a deal to raise the debt ceiling by demanding an additional $1 trillion in tax hikes in exchange for comprehensive tax reform.
Speaking to an audience at the U.S. Chamber of Commerce on Tuesday, Cantor said that Obama had offered to “de-couple” tax hikes on those making $250,000 or more in exchange for lowering tax rates later through comprehensive reform.
“As you know, the Speaker [John Boehner] ended the talks because the president insisted on raising the tax rates,” Cantor said. “From what I know – and there’s not a lot of detail that I do know about – that deal was premised upon decoupling of the Bush tax rates.”
“This was the notion that somehow you’re going to make permanent the rate at 35 percent for those [earning] under $200,000 [per year] and for everybody – individually under $200,000, couples $250,000 and over – you’re going to let those rates expire in the hopes that you’re going to get tax reform at a date certain and somehow that date certain is going to produce comprehensive tax reform that’s going to yield a lowering of the rates.”
However, Cantor said, Obama also demanded an additional $1 trillion in unidentifed tax hikes, forcing House Speaker John Boehner (R-Ohio) to walk out of the talks.
“The problem is, the president is also requesting an additional $1 trillion-plus in new revenues, which CBO right away scores as a tax increase.” (The CBO is the Congressional Budget Office.)
Cantor called Obama out on the latter’s stated desire for a grand bargain on the debt ceiling, saying that despite the rhetoric, Obama had yet to produce any details on what type of bargain he would accept.
“So, I’d like to see the specifics of what the president says his plans are,” Cantor said. “The Biden-yielded specifics, they were talked about in that meeting [July 11] and were quickly dispersed by the White House as to what the details were – again, those were the details that were discussed and identified [as] bipartisan under the Biden talks.”
In other words, the deal Obama offered Boehner would have allowed the top tax rates to rise as scheduled in exchange for Obama’s support of comprehensive tax reform, lowering all tax rates but closing loopholes and eliminating deductions. Obama also wanted at least more than $1 trillion in new unspecified tax increases.
Obama, according to Cantor, did not offer Boehner specifics on what that comprehensive tax reform might look like, only a promise that it would pass in the future, prompting Boehner to leave the talks.
The debt limit, or debt ceiling, is the amount of money the federal government is legally allowed to borrow. The current ceiling, which was hit on May 16, is $14.29 trillion. The talks between congressional leaders and the White House have concerned how to go about raising that debt ceiling another $2.4 trillion, with agreements on budget cuts and future spending, as well as the tax increases the president and the Democrats are advocating.
Congress is expected to vote on a potential debt limit increase before Aug. 2, 2011.