“When the going gets tough, Cantor gets going,” another Senate Democratic aide said. “Republicans haven’t been getting their way on cutting Medicare, plus since the ethanol vote, there’s been a growing consensus among even Republicans that revenues need to be part of the final solution. This was clearly too hot for Cantor to handle, and now he wants to kick the final deal-making upstairs to the Speaker’s office.”
From the beginning, there had been skepticism that the Biden group could reach a compromise given the partisans on each side, with an expectation that Obama, Boehner and Senate Majority Leader Harry Reid (D-Nev.) would have to cut a deal just as they did earlier this year on a continuing resolution to avoid a government shutdown.
And it also dashes hopes for now from Democrats that a Senate vote to eliminate ethanol subsidies might lead Republicans to agree to close other tax breaks and loopholes to reduce the deficit.
Still, lawmakers have an imperative to get something done before the government hits a potentially catastrophic default on its more than $14 trillion in debt. Treasury Secretary Timothy Geithner has warned that could happen as soon as Aug. 2.
Joseph Schatz, Emily Pierce and Jessica Brady contributed to this report.