OH NO: The US Debt Ceiling Negotiations Just Blew Up


Update 11:26 AM ET: Republican Senator Kyl has also pulled out of the debt ceiling negotiations.

Speaker of the House John Boehner says he doesn’t have the votes to pass any tax increase. He has called for President Obama to enter the debate, if they two sides are to come to a deal before the end of June.

It looks like the Biden talks are now over, and the war over any new tax hikes killed them.

Earlier: House Majority Leader Eric Cantor just pulled out of the debt ceiling talks over tax issues, according to WSJ.com.

Cantor says there is an “impasse” over taxes holding up negotiations that only President Obama and House Speaker Boehner can resolve.

Currently, Vice President Joe Biden is running these negotiations.

From the Wall Street Journal:

“We’ve reached the point where the dynamic needs to change,” Mr. Cantor said. “It is up to the president to come in and talk to the speaker. We’ve reached the end of this phase. Now is the time for these talks to go into abeyance.”

Thus far, both sides have agreed to $2 trillion in spending cuts over the next 10 years. But the issue of taxes is holding the whole thing up, according to Cantor.

On one side, the Democrats are calling for some tax increases to be included in the legislation. But Republicans are refusing to include any tax hikes in the deal.

Cantor is now leaving it up to Obama and Boehner to come to a deal.

Here’s Cantor’s full comment, via Politico:

“I believe that we have identified trillions in spending cuts, and to date, we have established a blueprint that could institute the fiscal reforms needed to start getting our fiscal house in order,” Cantor said in a statement. “That said, each side came into these talks with certain orders, and as it stands the Democrats continue to insist that any deal must include tax increases.”

“There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation. Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue.”

“Given this impasse, I will not be participating in today’s meeting and I believe it is time for the president to speak clearly and resolve the tax issue. 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.”

Don’t miss: Jeff Gundlach’s guide to the inevitable debt default >

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