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| FILE - This Jan. 15, 2013 file photo shows House Speaker John Boehner of Ohio walking on Capitol Hill in Washington. Republican leaders scramble for votes on a stopgap debt-limit measure that would let the government keep borrowing until at least mid-May, giving up for now on trying to win spending cuts from Democrats in return. But the respite would be only temporary, with major battles still to come between the GOP and President Barack Obama over taxes, spending and deficits. |
WASHINGTON (AP) -- Seeking to regain their budget footing versus President Barack Obama, Republicans controlling the House are moving quickly to try to defuse a potential debt crisis with legislation to prevent a first-ever U.S. default for at least three months.
The
Republicans are giving up for now on trying to extract spending cuts
from Democrats in return for an increase in the government's borrowing
cap. But the respite promises to be only temporary, with the stage still
set for major battles between the GOP and Obama over taxes, spending
and deficits.
The first step comes Wednesday
with a House vote on GOP-sponsored legislation that would give the
government enough borrowing leeway to meet three months' worth of
obligations, delaying a showdown next month that Republicans fear they
would lose.
Republicans leaving a two-hour meeting Tuesday afternoon appeared confident that the measure would pass.
While
it's commonly assumed that the Treasury Department wouldn't allow a
disastrous default on U.S.
Treasury notes, the prospect of failing to
meet other U.S. obligations such as payments to contractors,
unemployment benefits and Social Security checks would also be
reputation shattering. House Speaker John Boehner, R-Ohio, and other GOP
leaders have made it plain they don't have the stomach for it.
The
legislation is disliked by many Democrats, but the White House weighed
in Tuesday with a statement that the administration would not oppose the
measure, even though Obama just last week dismissed incremental
increases in the debt ceiling as harmful to the economy.
"I
am not going to have a monthly, or every three months conversation
about whether or not we pay our bills," Obama said at a news conference
Jan. 14.
But what was important to the White
House about the GOP proposal was that it separated the debt ceiling from
other upcoming fiscal target dates and that it signaled that, at least
for now, Republicans were not going to demand a dollar of spending cuts
for every dollar of federal borrowing as Boehner long has demanded.
It also appeared that Senate Democrats would grudgingly accept the bill.
"The
Boehner rule of 1-for-1, it's gone," said Sen. Chuck Schumer, D-N.Y.
"So it's a good step forward, and we'll see what happens."
The
idea driving the move by GOP leaders is to re-sequence a series of
upcoming budget battles, taking the threat of a potentially devastating
government default off the table and instead setting up a clash in March
over automatic across-the-board spending cuts set to strike the
Pentagon and many domestic programs.
Those cuts - postponed by the
recent "fiscal cliff" deal - are the punishment for the failure of a
2011 deficit supercommittee to reach an agreement.
These
across-the-board cuts would pare $85 billion from this year's budget
after being delayed from Jan. 1 until March 1 and reduced by $24 billion
by the recently enacted tax bill. Defense hawks are particularly upset,
saying the Pentagon cuts would devastate military readiness and cause
havoc in defense contracting.
The cuts, called a sequester in
Washington-speak, were never intended to take effect but were instead
aimed at driving the two sides to a large budget bargain in order to
avoid them.
But Republicans and Obama now
appear on a collision course over how to replace the across-the-board
cuts. Obama and his Democratic allies insist that additional revenues be
part of the solution; Republicans say further tax increases are off the
table after the 10-year, $600 billion-plus increase in taxes on
wealthier earners forced upon Republicans by Obama earlier this month.
"We are not going to raise taxes on the American people," Boehner told reporters.
"We
feel by moving the issue of raising the debt ceiling behind the
sequestration ... that we reorder things in a way that Democrats will
have to work with," said Rep. John Fleming, R-La. "The cuts are the kind
of cuts we want, they're just not in the places we want, but they're
also not in the places that the Democrats want. So hopefully they'll be
forced to come to the table and work with us on a bipartisan basis to
put them where they need to be, where it has the less pain."
According
to the latest calculations, which account for the recent reduction of
this year's sequester from $109 billion to $85 billion, the Pentagon now
faces a 7.3 percentage point across-the-board cut, while domestic
agency budgets would absorb a 5.1 percent cut. The calculations are not
official but were released Tuesday by Richard Kogan, a respected budget
expert with the Center on Budget and Policy Priorities think tank.
"The
sequester is arbitrary, but the fact is that when the sequester goes
into effect ... it will have a pretty dramatic effect of people's
attitudes here in Washington and they may get serious about cuts to the
mandatory side of the spending equation," Boehner said, referring to
benefit programs like Medicare and food stamps whose budgets essentially
run on autopilot.
GOP leaders have also
promised conservatives that the House will debate a budget blueprint
that projects a balanced federal budget within a decade. For the past
two years, the fiscal plans of Budget Committee Chairman Paul Ryan,
R-Wis., have contained strict budget cuts but have never projected
balance.
In a slap at the Senate, which hasn't
debated a budget since 2009, the House debt measure would withhold the
pay for either House or Senate members if the chamber in which they
serve fails to pass a budget plan. This "no budget, no pay" idea had
previously been regarded mostly as a gimmick and had been earlier
dismissed by many lawmakers as unconstitutional since it seems to run
counter to a provision in the Constitution that says Congress can't
change its pay until an election has passed.
To address that problem, the measure would deny pay until Jan. 3, 2015, if either chamber failed to pass a budget.
Schumer
said Sunday on NBC's "Meet the Press" that Democrats are likely to
adopt a budget this year. Under congressional rules, a joint
House-Senate budget resolution is a nonbinding measure that sets forth
an outline for follow-up legislation but doesn't accomplish any cuts by
itself.
