Speaker John Boehner has set the House on a collision course with the Obama administration, insisting that he won’t allow an increase in the debt ceiling unless the raise is offset by an equal or greater amount of spending cuts.
“When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase,” the Ohio Republican said Tuesday at a Washington event hosted by the Peter G. Peterson Foundation, an organization that urges deficit reduction.
“This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance.”
The debt ceiling allows the federal government to continue to pay its bills without the risk of default. At the end of the year the government will reach its $16.394 trillion borrowing limit.
Boehner last year forced the Obama administration and congressional Democrats to agree to match a debt ceiling increase with spending cuts, after a showdown that almost led the federal government to default on its debts.
White House spokesman Jay Carney said in response to Boehner’s threat: “We cannot hold the full faith and credit of the United States government hostage to one party’s political agenda.”
The administration wants to sever the debt-limit issue from negotiations on taxes and spending to avoid the possibility of political gridlock and government default, the Wall Street Journal reported.
And Treasury Secretary Timothy Geithner said at the Peter G. Peterson Foundation event that he hopes Washington can raise the debt limit “without the drama and the pain and the damage” of last year.
The New York Times attacked Boehner’s vow on Tuesday, calling it “extortion.”
The Times editorial stated: “Washington’s need to deal with the long-term deficit can be met only with a combination of new revenues and rational cuts, not extortion. The overly deep cuts in last year’s deal were necessary only because Republicans refused to end tax cuts for the rich.”
But Boehner said on Tuesday: “This is a line in the sand because Washington has kicked the can down the road, kicked the can down the road, kicked the can down the road, and the American people think we’re crazy.”
The annual federal budget is about $3.8 trillion, and the government expects to bring in about $2.5 trillion in revenue this year, so Geithner said the government will likely hit its borrowing limit later this year.
The debt limit debate threatens to become the latest standoff between Democrats and Republicans on fiscal issues. Democrats want a mix of tax increases and spending cuts to reduce the deficit, while Republicans have called for spending cuts and overhauls of entitlement programs like Medicare.
The Obama administration vows that it won’t extend the Bush tax cuts next year for families making more than $250,000 a year, and many GOP legislators insist they won’t vote to raise taxes.
Presumptive Republican presidential nominee Mitt Romney weighed in on the standoff on Tuesday, telling voters in Iowa: “I do not, for one moment, share my opponent’s belief that our spending problems can be solved with more taxes. You do not owe Washington a bigger share of your paycheck.”
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