Boehner draws line in sand on debt ceiling
The Speaker of the House says any raise in the debt ceiling must be accompanied by steep cuts.
House Speaker John Boehner said Tuesday that when Congress raises the nation's borrowing cap he will again insist on spending cuts and budget reforms to offset the increase.
In remarks Tuesday afternoon at a budget conference in Washington, the Ohio Republican said he welcomes another wrenching debate on increasing the so-called debt limit because it forces a Congress and White House plagued by gridlock to make difficult decisions.
Boehner also said that the GOP-controlled House will vote to extend Bush-era tax cuts due to expire at the end of the year and that the House will act next year on "broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits and special carveouts."
According to Treasury Secretary Tim Geithner, the government will hit its borrowing cap later this year, but Treasury can use accounting maneuvers to buy time for the newly elected Congress to deal with the issue early next year.
About a year ago, Boehner made a similar promise demanding spending cuts spread over a decade exceed the amount of increase in the debt limit, which at the time was discounted by some in official Washington.
"When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase," Boehner said at a "budget summit" sponsored by the Peter G. Peterson Foundation, a nonpartisan group that advocates tackling the nation's debt problem. "This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance."
Asked whether President Barack Obama agreed that any increase in the debt ceiling should be offset by spending cuts, White House spokesman Jay Carney said that scenario would present an ugly repeat of last year when Republicans held the U.S. government credit "hostage," as Carney put it.
"It can't possibly be the case that the right prescription for what we need to do right now is to engage in the kind of political brinksmanship that, unfortunately, congressional Republicans engaged in last year," Carney said. "So we're not going to do that."
Yet it was unclear how the White House could prevent it if the Republican-led Congress again insists on commensurate cuts. Carney said Obama would again demand balancing spending cuts with an increase in tax revenue, which Republicans have rejected.
Boehner said it may take one or more stopgap debt increases to buy time for a larger bargain.
Last year, Congress and Obama — with Boehner playing a lead role — agreed on a 10-year, $2 trillion-plus package of spending cuts the coming decade. The measure paired caps on domestic agency operating budgets with the promise of $1.2 trillion in further deficit cuts though a so-called deficit supercommittee.
But the supercommittee's failure to reach a deal has forced a scheduled painful round of automatic spending cuts at the Pentagon and other Cabinet agencies next year, along with a 2 percent cut to Medicare providers. Lawmakers are already trying to unwind those cuts, which take effect in January.
Boehner seemed to warn that he won't permit such a scheme this time around.
"Just so we're clear, I'm talking about real cuts and reforms — not these tricks and gimmicks that have given Washington a pass on grappling with its spending," he said.
Geithner warned against a replay of last summer's debt crisis, which led to a downgrade in the U.S. government's credit rating.
"This commitment to meet the obligations of the nation, this commitment to protect the creditworthiness of the country is a fundamental commitment you can never call into question or violate because it's the foundation for any market economy," Geithner said Tuesday morning at the same event. "This allows us to govern, to fight wars, to deal with crises, recessions, to adjust to a changing world."