WASHINGTON - Republicans on Thursday pulled out of bipartisan talks aimed at finding ways to cut trillions of dollars from future federal budget deficits while raising the government's debt ceiling, triggering fresh fears of deadlock that could roil financial markets and kick the economy back into recession.

House Majority Leader Eric Cantor (R., Va.) and Senate Minority Whip Jon Kyl (R., Ariz.) said they wouldn't continue because Democrats were pushing for higher tax revenues in any agreement.

The Republicans' withdrawal from the seven-week-old negotiations, chaired by Vice President Biden, staggered prospects for a deal.

"I believe that we have identified trillions in spending cuts, and to date we have established a blueprint that could institute the fiscal reforms needed to start getting our fiscal house in order," Cantor said. "Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue."

Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben S. Bernanke have warned that failing to increase the nation's debt ceiling, or legal borrowing limit, by Aug. 2 risks a U.S. default on debts owed, which could convulse financial markets and lead to renewed recession.

It's likely President Obama and House Speaker John Boehner (R., Ohio) will become more directly involved in crafting a plan to raise the nation's $14.3 trillion debt limit by Aug. 2, the day that government borrowing authority is expected to run out, while dramatically cutting deficits.

"The goal of these talks was to report our findings back to our respective leaders. 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," Biden said in a statement. "For now the talks are in abeyance as we await that guidance. We stand ready to meet again as necessary."

"I think it's in the hands of the speaker and the president and, sadly, probably, me," said Senate Majority Leader Harry Reid (D., Nev.).

First they'll have to overcome, or at least finesse, Republican rejection of any tax increase. Whether the GOP walkout is a short-term negotiating tactic or an unyielding commitment against compromise is difficult to say at this stage; but with Democrats in charge of the White House and Senate, and Republicans at the helm of the House of Representatives, refusal to compromise dictates deadlock - and probably default.

Experts are concerned that there may not be enough time to get a detailed plan enacted that would satisfy nervous financial markets before the Aug. 2 deadline.

"They really are playing with fire here. I don't know where it ends," said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan budget watchdog group. "It makes it much harder to reach an agreement by Aug. 2, and it makes default much more likely in some form or another."

The projected fiscal 2012 deficit is $1.5 trillion. Over the next decade, the government is projected to amass nearly $7 trillion in deficits under current law.

The Biden group, meeting regularly since May 5, was trying to iron out an agreement that would cut deficits by at least $4 trillion over 10 years. It hoped to have some kind of blueprint by a week from Friday, giving lawmakers time to review the plan, offer changes, write up the deal, and push it through Congress.

There were some glimmers of hope. Senate Finance Committee Chairman Max Baucus (D., Mont.), a member of the bipartisan Biden group, said "there's a lot of time" still to reach an agreement.

And Boehner put an important smidgen of distance between himself and Cantor, a doctrinaire conservative.

Boehner, who can be conciliatory, responded this way when asked just what would constitute a tax increase, and whether he opposed increases in tax rates only or also opposed closing tax loopholes: "We have been opposed to increasing tax rates," he said.

He was asked whether he supported Cantor's decision.

"I understand his frustration," Boehner said. "I understand why he did what he did."

Boehner and Obama have been talking. The two played golf Saturday, and they spoke Wednesday before the president addressed the nation about Afghanistan. White House spokesman Jay Carney said Boehner and the president discussed a wide range of issues Wednesday.

Boehner said Thursday it was "time for President Obama to speak clearly and resolve the tax issue."

Carney quickly responded.

"I would point out that the president supports a balanced approach" to debt reduction, Carney said.

"He does not support an approach that provides for a $200,000 tax cut for millionaires and billionaires paid for by a $6,000-a-year hike in expenses and costs for seniors," he said, referring to a Republican House plan to trim the cost of the Medicare health care program that critics say would burden seniors enrolled in it with higher costs.

The Biden group met for more than three hours Wednesday, a session described as contentious. Another meeting had been set for Thursday afternoon, until Cantor abandoned the effort.

Democrats continue to press for more revenue, perhaps by limiting deductions for the wealthy and curbing special-interest tax breaks.

"You need to take a balanced approach" to deficit reduction, said Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee and a Biden group member.

Democrats have pushed several ideas to raise revenue, but they've avoided increases in tax rates.

Instead, they talk about ending or reducing breaks for specific industries, such as oil and natural gas.

Sen. Charles Schumer (D., N.Y.) has proposed ending $4 billion worth of annual breaks to the "big five" oil companies, such as limiting deductions for domestic production and intangible drilling and development costs.