Faced with mounting pressure to avoid defaulting on the country’s debt, House Republican leadership changed its tenor Thursday, suggesting it would vote to raise the federal debt ceiling if it could simultaneously curb spending. The details of the negotiation are currently being discussed among Republican leadership, said House Budget Committee Chairman Rep. Paul Ryan, R-Wisc.
“I don't want to rubber-stamp big government in raising the debt ceiling,” Ryan said at the National Press Club Thursday afternoon. “Republicans aren't interested in just a naked debt ceiling increase.”
In a brief question and answer period after being sworn in to office Wednesday, Ryan dismissed reporters’ questions about the debt limit, saying the debate was still months away. His remarks Thursday, however, echoed what newly elected House Speaker John Boehner, R-Ohio, said just hours before in response to the Obama administration’s notification that the government will reach the current debt limit of $14.3 trillion this spring. The debt limit was last increased in February.
For those hoping President Obama’s tax cut compromise with Republicans in the lame-duck session might signal a new era of cooperation over the next two years, Ryan said he wasn’t nearly as optimistic.
In the event President Obama and the Democrats fail to reach an agreement with the GOP, Ryan turned the debate around, saying: “It would be irresponsible if the president brings about a default of the country if he refuses to sign a bill to raise the debt ceiling increase.”
Democrats want a debt ceiling increase with no strings attached.
Earlier this morning Treasury Secretary Timothy Geithner urged Congress to raise the debt limit, warning that it could lead to job loss, drive up interest rates and make it more costly for U.S. companies to borrow money.
Geithner warned that failure to raise the debt limit would mean the government would not be able to make the payments on the current debt, which stands at over $14 trillion, and it would have “unthinkable” consequences, including a government shutdown.
Besides the House’s Republican leadership, other members have signaled their unwillingness to raise the debt ceiling, especially those backed by the Tea Party. Michele Bachmann, the outspoken Minnesota Tea Party darling, is one of them. “I don’t think it’s good to see the shutdown of government,” she told NBC News on Wednesday. “I don’t think that’s good for anyone. But at the same time, in the last 10 years, we’ve raised the debt ceiling 10 times. That’s what people asked us to do in this last election: Stop the spending because we can’t continue to raise the debt ceiling.”
As for spending cuts, Ryan defended Republicans' pledge to trim $100 billion from the budget, an overarching theme of the party during the 2010 midterm elections. “If people think we're afraid of cutting a hundred billion dollars, they got another thing coming,” he said. “This is just the beginning.”
Ryan said with half the fiscal year gone, hitting a $60 billion target, rather than the pledged $100 billion, is achievable.
“It's not a backtrack of policy,” he said. “That's just the down payment.”
The House will also seek to reduce the fiscal year 2012 budget to mirror government spending levels from those in fiscal year 2008. The remainder of the 2011 budget will continue to pare back more spending cuts.
“As the 112th Congress begins, the new House Republicans are starting off by returning to their old ways,” said Democratic Whip Steny Hoyer in a statement. “Their rules package shows that while they made promises to the American people that they would govern differently and cut the deficit, they are already failing to live up to their pledge.”
Obama has said the U.S. needs to make tough decisions on spending and taxes, and has signaled he will examine overhauling the U.S. tax code as one way to address the country's fiscal challenges.
Although Ryan offered no spending cut specifics, he wants to reduce the entire discretionary spending cap and tackle the Defense Department’s $508 billion budget. Defense Secretary Robert Gates is expected to announce nearly $100 billion in savings for the Pentagon and cuts to some weapons programs, including a ground missile launching system and an amphibious landing craft. On Tuesday, Rep. Eric Cantor, R-Va., said everything was on the table when asked about defense cuts.