SPEAKER PULLS OUT OF DEBT TALKS – AT 8:43 P.M. ET:  The speaker of the House has pulled out of crisis debt talks scheduled for tomorrow at the White House, plunging the talks into uncertainty.

Speaker John Boehner is pulling out of negotiations for a large-scale deficit reduction plan.

In a statement released by the Ohio Republican Saturday night — just a day before talks with President Barack Obama — Boehner said the “White House will not pursue a bigger debt reduction agreement without tax hikes.”

The statement read: “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

House Majority Leader Eric Cantor (R-Va.) was pushing for a smaller scale deal, wary of how the GOP would be able to pass a larger deal.

COMMENT:  The debt debate currently in progress is one of the most important debates in our recent history.  If we can't get our fiscal house in order, we're going to turn into, as the old phrase goes, a pitiful, helpless giant.  Historically, Republicans have caved in on economic negotiations to get a deal, often abandoning party principles.  They seem to be toughing it out this time, in part because they have the power of a House majority behind them...and all money bills must originate in the House.  But let's see what happens when crunch time comes.  The Dems, with their press allies, will blame any failure on the GOP.

July 9, 2011