Boehner rallies GOP on debt limit

Boehner told Republicans they could lose leverage in the debate as the deadline nears. | Jay Westcott/POLITICO By: John Bresnahan and Jake Sherman and Jonathan Allen July 12, 2011 11:09 AM EDT

Speaker John Boehner told a closed gathering of House Republicans on Tuesday morning that he was “pissed” over being unable to reach a “grand bargain” with President Barack Obama to make sweeping entitlement changes in return for an overhaul of the U.S. tax code. But Boehner also accused Obama of failing to lead on the impending crisis over boosting the $14.3 trillion debt limit, according to people inside the GOP meeting. But while Boehner was trying to rally his Republican troops Tuesday morning, he did warn them that they will quickly lose leverage in the debate as the country grows closer to the Aug. 2 debt default deadline and Wall Street and business leaders pressure them to cut a deal. House Majority Leader Eric Cantor, who opposed Boehner’s efforts to cut a “grand slam” deal with Obama, was just as blunt as the speaker. Cantor told rank-and-file Republicans that unless Democrats drop their insistence on tax increases as part of an agreement to raise the debt ceiling, there may be no compromise possible with Obama and Democratic congressional leaders. “If the Democrats continue to insist on tax increases, there is no viable path forward,” Cantor warned, according to sources. The overwhelming sentiment from House Republicans, according to those present in the room, was that even $2 trillion in cuts over 10 years — roughly what is being discussed at the White House meetings — isn’t sufficient. Republicans want even more cuts, and they want them immediately. Moderate Rep. Cliff Stearns of Florida, a 22-year veteran of the House, stood up and said $2.5 trillion wasn’t enough for a deal. Florida Rep. Allen West emerged from the meeting to say that he didn’t want “fairy dust spending cuts” that are projected over the next decade. Boehner said in a press conference after the meeting that the debt ceiling increase is “his problem” — referring to Obama. Boehner escalated his rhetoric against the president, saying that Obama “talks a good game, but when it comes time to actually putting these issues on the table, making decisions, he can’t quite pull the trigger.” “Finding an agreement certainly has been elusive,” Boehner added. Boehner and Cantor's comments came as the two prepared to head to the White House later today for a third straight day of high-level talks over a debt compromise. Boehner, Cantor, Senate Minority Leader Mitch McConnell and Senate Minority Whip Jon Kyl have flatly refused to consider any tax increase as part of the deal to boost the debt limit. They have dug in over this issue, refusing to give any ground to Democratic demands that some tax increases — including closing corporate loopholes and the expiration of the Bush tax cuts for the wealthiest Americans — must be part of the package. In fact, Boehner told the gathered lawmakers in the Capitol basement that “at no time, ever, during” discussions with Obama “did I agree to let taxes go up.” The speaker said that when it was clear Obama would only reform entitlement if it was accompanied by tax increases and he would only reform the tax code “to maintain many of the current code’s flawed features,” he walked away. “I haven’t spent 20 years here fighting tax increases just to throw it all away in one moment,” Boehner said, according to a source in the room. Lawmakers who attended the Tuesday briefing said Boehner and Cantor were not hopeful that an agreement can be reached before the Aug. 2 default deadline. “Are they optimistic? No,” Illinois Rep. Joe Walsh said of the leadership. Walsh accused the White House of being “clueless on the severity of the problem.” During the almost two-hour meeting, Boehner walked through the details of what would have been in the “grand slam” package he explored with Obama. The speaker insisted that he would never support tax increases, despite media reports saying he was open to changes to the tax code that would have yielded as much as $1 trillion in new revenues over the next decade. Boehner and Cantor openly split on this issue, forcing Boehner to back away from his secret talks with Obama. The Ohio Republican said he wanted to simplify the tax code and have just three rates for taxpayers as part of a tax-reform package, which would have been implemented by early 2012. Boehner said Obama wanted more “progressivity” in the tax rates than the speaker would accept — meaning higher taxes on upper incomes and more layers of tax rates. Boehner told his colleagues that it became clear to him that Obama wouldn’t agree to major changes in Medicare and Medicaid “for the near and short term,” including lifting the age eligibility for Medicare benefits. Boehner said the GOP position has three major points — restraints on federal spending, including enforceable caps; no tax increases; and more spending cuts than the increase in the debt limit. Cantor, who gave a presentation laying out his take on what is being discussed at the White House, said Obama and the Democrats are pushing three options: a “skinny” proposal put forth by Nevada Sen. Harry Reid with no entitlement cuts or tax increases, discretionary cuts and amounts to less than $1 trillion, which Cantor suggested is dead in the water. He also laid out “Obama’s version: Biden Framework,” which had savings of $2 trillion, some changes to Medicare, nothing done with Social Security and $1.1 trillion in discretionary cuts. Cantor went on to lay out the “Biden framework details,” with between $264 billion and $332 billion in mandatory cuts and between $334 billion and $353 billion in health savings — the majority leader said the Biden group cuts amount to savings between $1.9 trillion to $2.1 trillion. Obama’s big deal, as Cantor laid out in a presentation, de-coupled the Bush tax cuts, added $1 trillion in revenue and “comprehensive tax reform by date certain.” On the spending side, he adjusted Medicare age, increased means testing, the consumer price index and $1.2 trillion in discretionary cuts. Cantor suggested Democrats were “not serious” about reaching a bipartisan agreement at this point. Rank-and-file GOP lawmakers then blamed the media for playing up divisions between Boehner and Cantor, and they bashed Obama for what they claim is a leadership failure. “Clearly, there’s a large gap between where the president is and where we are,” said Alabama Rep. Martha Roby. Asked whether that gap could be closed, she said, “Only time will tell. The problem is we’re running out of time.” She said it’s impossible to negotiate with a president who hasn’t presented a plan. “The president needs to get his plan down on paper,” Roby said. “We have yet to see his plan.” Alabama Rep. Jo Bonner, continuing on the theme that Obama must do more, asked, “How is the president going to help us get out of this?”