Cantor to step down after defeat

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iol pic wld-USA-ELECTIONS-cantor Reuters US House majority leader Eric Cantor pauses while discussing his defeat in the Virginia Republican primary election during a news conference on Capitol Hill in Washington. Picture: Jim Bourg

Washington - A shock primary election defeat for Eric Cantor, the No 2 Republican in the US House of Representatives, left his political party in chaos on Wednesday as financial markets worried the shakeup might renew budget fights that in the past have caused government shutdowns and near credit defaults.

Cantor, who has served as House Majority Leader since 2011, unexpectedly lost in Tuesday's vote to college economics professor David Brat, who has strong support from the Tea Party movement and grass-roots activists who want to reduce federal government spending and taxes and advocate for a smaller government.

The defeat put an end to Cantor's quest for an eighth term but he will serve out his current term through this year. It also brought an abrupt halt to Cantor's career as a rising star who had his eye on the top job of Speaker.

House Speaker John Boehner cried during a closed-door meeting of House Republicans, according to some who attended. Praising Cantor's work as majority leader, he said: “We've been through a lot together.”

At a press conference following that meeting, Cantor announced he will step down from his leadership job on July 31.

Representative Kevin McCarthy of California would have his backing to replace him, if he seeks it, Cantor said. He and McCarthy were close allies and they often had to try to scale back the demands of the Tea Party.

Representative Pete Sessions of Texas, who chairs the House Rules Committee, told reporters he would run for majority leader. McCarthy and Sessions both have conservative voting records. Other Republicans also could vie for the job, with an election set for June 19.

Trying to heal intra-party rifts that have plagued House Republicans for the last three years, Cantor said: “The differences that we may have are slight, and pale in comparison with the differences that we have with the left.”

Capitol Hill buzzed with speculation over whether the Tea Party victory in Cantor's Richmond, Virginia-area district could bring Washington back to the showdowns of 2011, 2012 and 2013 over budget deficits and the size of government.

Financial market analysts feared a disruption from the relative political calm that had prevailed since a December 2013 budget deal.

“I just think it underscores the total political dysfunction” in US politics, said Doug Kass, president of Seabreeze Partners Management in Palm Beach, Florida. Noting the need for fiscal and regulatory reform, he said: “This defeat suggests it may retard it.”

The turmoil, however, has given Democrats a breather from a string of politically damaging events that were preoccupying Washington less than five months before congressional elections.

As they try to keep control of the Senate in November's elections, Democrats have been battered by a scandal over the administration's failure to provide veterans with timely healthcare and President Barack Obama's decision to swap five high-level Taliban prisoners for an American prisoner of war in Afghanistan.

More than a dozen House Democrats, gathered at a press conference to promote a manufacturing bill, were all smiles as they revelled in the Republican Party's turmoil.

“We have seen over the last three years a (Republican) party that is deeply divided and dysfunctional. I think last night was evidence of that,” said Democrat Representative Steny Hoyer, the second-ranking House Democrat.

The election result was an ironic turn for Cantor, who vaulted into the No. 2 job in 2011 after he helped Republicans capture the chamber the previous November on a wave of Tea Party support. A number of factors, including low turnout of 65 000 voters, contributed to Cantor's defeat.

Boehner is expected to remain in his position through this year and to seek re-election to the job next year if Republicans maintain control of the chamber, as expected, in November elections.

But some conservative Republicans were speculating that whoever emerges as a Cantor replacement could also become a challenger to Boehner for the speakership next year.

Tea Party discontent with Republican leadership was at a boil level and activists were eager to flex their muscles after the win in Cantor's district.

Tea-Party backed Representative Tim Huelskamp of Kansas, who has been at odds with House Republican leadership, said conservatives “have been frustrated over and over again for the last three and a half years about a team, not just Cantor, that rode the Tea party-conservative wave, (but) none of them with real conservative bona fides”.

Still unclear was whether Cantor's defeat could even resonate in the 2016 presidential campaigns, as the Republican Party battles over whether to put forward a nominee with Tea Party leanings or someone more mainstream, like former Florida Governor Jeb Bush, who could have the broader political appeal needed to win the White House.

In the primary campaign, Brat accused Cantor of being too willing to compromise with Democrats on immigration and budget issues and of not fighting hard enough against Obama's signature healthcare law known as Obamacare.

That, despite Cantor's role in staging more than 40 votes in the House to repeal all or parts of Obamacare over the last few years.

One leading House Republican, Representative Paul Ryan of Wisconsin, told reporters he was not interested in a party leadership job. He is expected to take over the powerful House Ways and Means tax-writing panel next year and has been mentioned as a possible 2016 presidential hopeful. - Reuters

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