House Speaker John A. Boehner told his troops Saturday that he hopes to roll out a two-step strategy within the next 24 hours for raising the federal debt ceiling to avoid roiling Asian financial markets when they open Sunday, according to several participants in the conference call.
In the call with his House GOP colleagues, Boehner (Ohio) said he still hopes to slice as much as $4 trillion out of the federal budget over the next decade, despite the collapse of talks with President Obama on Friday over a bipartisan “grand bargain” to restrain the nation’s debt.
Top Republican aides said Boehner envisions a short-term extension of the debt limit that would include spending cuts that meet or exceed the debt limit increase. That would be paired with a strategy for finding additional savings. Options include a new super committee of the sort proposed by Senate Majority Leader Harry M. Reid (D-Nev.). Another option would be to tell existing legislative committees to make policy changes over the next few months aimed at meeting the savings targets.
In the call, Boehner stressed that the path forward would be a new plan, not a proposal offered earlier this month by Senate Minority Leader Mitch McConnell (R-Ky.) to authorize Obama to raise the debt limit on his own, without explicit congressional approval.
Freshman Rep. Blake Farenthold (R-Tex.) confirmed that Boehner was open to a short-term deal that would allow more time to solve the problem, but added that Republican leaders remain worried that even a temporary lift of the government’s borrowing authority would fail on the House floor.
“If it takes a short-term deal, they’ll bring it to the floor. I think their concern about bringing it to the floor is whether they can get 218 [votes] or not,” he said. “Everybody wants to only go through this pain once.”
Boehner spokesman Michael Steel said that the speaker is seeking “progress” within 24 hours, rather than a full-blown deal. Congressional leaders are staying in touch with the White House, he said, and “working in good faith with the goal of having something to present to their members on Monday.”
Senate Majority Leader Harry Reid (D-Nev.) issued a statement reaffirming his opposition to a short-term debt ceiling increase.
“I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi,” he said. “We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.”
Earlier Saturday, congressional leaders held a brief emergency meeting at the White House to try to work out a deal with Obama that would avert a potentially catastrophic U.S. credit default in 10 days.
Efforts to raise the nation’s $4.3 trillion legal limit on government borrowing were thrown into chaos Friday after Boehner abandoned talks with the White House in what he said was a dispute about taxes.
After meeting for less than an hour on Saturday, the congressional leaders were told to report back to the White House by 5 p.m. on whether they will be able to reach an agreement, according to a person familiar with the talks.
Top Republican aides said Boehner envisions a short-term extension of the debt limit that would include spending cuts that meet or exceed the debt limit increase. That would be paired with a strategy for finding additional savings. Options include a new super committee of the sort proposed by Senate Majority Leader Harry M. Reid (D-Nev.). Another option would be to tell existing legislative committees to make policy changes over the next few months aimed at meeting the savings targets.
In the call, Boehner stressed that the path forward would be a new plan, not a proposal offered earlier this month by Senate Minority Leader Mitch McConnell (R-Ky.) to authorize Obama to raise the debt limit on his own, without explicit congressional approval.
Freshman Rep. Blake Farenthold (R-Tex.) confirmed that Boehner was open to a short-term deal that would allow more time to solve the problem, but added that Republican leaders remain worried that even a temporary lift of the government’s borrowing authority would fail on the House floor.
“If it takes a short-term deal, they’ll bring it to the floor. I think their concern about bringing it to the floor is whether they can get 218 [votes] or not,” he said. “Everybody wants to only go through this pain once.”
Boehner spokesman Michael Steel said that the speaker is seeking “progress” within 24 hours, rather than a full-blown deal. Congressional leaders are staying in touch with the White House, he said, and “working in good faith with the goal of having something to present to their members on Monday.”
Senate Majority Leader Harry Reid (D-Nev.) issued a statement reaffirming his opposition to a short-term debt ceiling increase.
“I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi,” he said. “We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.”
Earlier Saturday, congressional leaders held a brief emergency meeting at the White House to try to work out a deal with Obama that would avert a potentially catastrophic U.S. credit default in 10 days.
Efforts to raise the nation’s $4.3 trillion legal limit on government borrowing were thrown into chaos Friday after Boehner abandoned talks with the White House in what he said was a dispute about taxes.
After meeting for less than an hour on Saturday, the congressional leaders were told to report back to the White House by 5 p.m. on whether they will be able to reach an agreement, according to a person familiar with the talks.
Obama called the meeting late Friday after Boehner said he was walking out on negotiations for the second time in two weeks.
Neither Obama nor the lawmakers made comments at the end of the talks. Reid, McConnell and Pelosi returned to the Capitol after the meeting.
In a statement, McConnell said: “The President wanted to know that there was a plan for preventing national default. The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending.”
“As I said last night, over this weekend Congress will forge a responsible path forward,” Boehner said in a statement. “House and Senate leaders will be working to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States.”
The Treasury Department has said the nation’s debt ceiling must be raised by Aug. 2 or the government is at risk of defaulting on its debt — a situation that many believe could push the United States back into recession and throw financial markets into turmoil.
On Friday, Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke met to discuss the implications of what might happen if Congress does not increase the limit.
Ahead of the Saturday talks, a House GOP aide signaled that Boehner’s most likely position would be to push for a shorter-term deal. Both sides have identified more than $1 trillion in cuts, and the speaker’s camp suggested that some of those reductions could be used to meet the Republican demand of lifting the debt ceiling by cutting more than the dollar value of that increase in borrowing authority.
Obama has repeatedly objected to any short-term deal, calling it “kicking the can down the road,” because there is a likelihood that the two sides would reach the same gridlock next year once such an extension was set to expire.
On Saturday morning, the GOP aide said, Obama was just trying to avoid dealing with the issue next year, when he will face reelection.
“Now, we do not know what size or shape a final package will take, but it would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his reelection campaign,” said the aide, speaking on the condition of anonymity to discuss Boehner’s strategy.
“We want the most significant deficit-reduction possible, but linking the full faith and credit of the United States to presidential campaign politics is not a defensible position.”
The president restated his opposition to a short-term extension of the debt limit during the Saturday morning meeting with congressional leaders, according to a White House statement, saying it would leave the country’s credit rating at risk.
“As the current situation makes clear, it would be irresponsible to put our country and economy at risk again in just a few short months with another battle over raising the debt ceiling,” the statement said.
All three major credit rating agencies have threatened to downgrade the U.S. credit rating if the debt limit is not raised. Its AAA rating identifies U.S. Treasury bonds as one of the world’s safest investments — and has helped the nation borrow at extraordinarily low rates.
Before the talks collapsed, the two sides had reached common ground on a two-stage strategy for raising the debt limit and cutting more than $4 trillion from the federal budget through 2021.
That plan called for cuts in agency spending and significant changes to Medicare and Social Security. It also included an overhaul of the tax code that could have lowered personal and corporate income tax rates while reducing an array of popular tax breaks.
The talks stalled as the two sides tried to reach agreement on the magnitude of the tax and entitlement changes and how to force Congress to meet the goals of the plan.
