House Speaker John Boehner assigned his No. 2, House Majority Leader Eric Cantor, to hammer out a deficit reduction package to be attached to raising the debt ceiling with Vice President Joe Biden two months ago. It was a calculated move: whatever the end product was, Cantor had a stake in it and therefore had to support it in front of the House GOP conference. Cantor, a would-be leader of the Tea Party freshmen, was in a box: How could he endorse a package that would ultimately include revenue increases– something the Grover Norquists of the world might perceive as tax hikes? It was a trap he found a way out of: Cantor abruptly left the talks last month in protest that he could not in good conscience sign on to anything that included raising taxes. Problem solved for Cantor, right? Wrong.
When leaving the Biden talks, Cantor called on Boehner and President Barack Obama to get involved in the talks. “‘[I]t is up to the President to come in and talk to the Speaker,” Cantor said on June 22. “The next phase is in the hands of those leaders, who need to determine the scope of an agreement that can tackle the problem and attract bipartisan support… For now, the talks are in abeyance as we await that guidance.”
But when that guidance came, Cantor didn’t like it. Boehner informed Cantor last Wednesday he planned to go big — really, really big — putting tax reform and entitlement reforms on the table for a deal worth upwards of $4.5 trillion in savings, a historic package. The next day, in a White House meeting with Obama and congressional leaders, Cantor came out against a grand bargain. Such large tax revenues could not pass the House, he said. Rumors swirled on Capitol Hill of dissent between Cantor and Boehner: Would the Senate have to go first, some wondered, to give Boehner the cover of GOP support and prevent a coup within the House conference? Two days later, Boehner dropped his support for the grand bargain. But, interestingly, in the two meetings since, Boehner has had little to say. He has left the talking to Cantor.
In the Monday White House meeting, Cantor proposed cuts to Medicare benefits, but nothing that might entice Democrats. Go learn the definition of “shared sacrifice,” Obama scoffed. He assigned Cantor homework: We are short of the $2.4 trillion goal that will get us past the 2012 elections, find some cuts that Republicans don’t particularly like to put on the table, we’ve already offered you a bunch of cuts Democrats don’t like. You must, Obama said, work to meet us in the middle.
Boehner hardly said a word in the meeting. His stance seems to be: if Cantor didn’t like the grand bargain, he’s welcome to negotiate one on his own. Republicans left the meeting noticeably subdued. Few had anything they wanted to say about it. And Cantor may have just jumped from the frying pan of Biden’s debt talks and into the fire of Obama’s. He has little experience hammering out legislative deals — particularly at this level. He wanted a smaller deal, and now Boehner’s sitting back and watching silently as Cantor flounders. A deal without at least some symbolic revenue increases, even if they’re offset with an Alternative Minimum Tax or another fix, cannot pass the Senate. Cantor is quickly learning that the purism that plays with the freshmen doesn’t work in the Oval Office. It will be interesting to see how long he lasts as the loudest negotiator, especially if the markets start to freak out. The Dow dropped nearly 200 points on Monday. Give it a week and we’ll be near TARP levels of panic.