House leaders offer short-term debt increase

<i>This post has been updated, as indicated below.</i>

WILLIAMSBURG, Va. – House Republicans announced Friday that they will vote next week to authorize a temporary extension of the debt limit, pushing off a politically unpalatable fight in the hopes of extracting further spending cuts from Democrats in a new budget deal.

The new offer, announced at the conclusion of a three-day retreat, represents a modification of the Republican leadership’s previous demand that any debt limit increase, temporary or otherwise, must include equivalent spending reductions. The temporary increase this time comes with the stipulation that it will “give the Senate and House time to pass a budget,” something the GOP notes that the Democratic-led Senate has failed to do so for years.

A leadership aide argued that it is consistent with the so-called “Boehner Rule,” which requires spending cuts or reforms in return for a debt-limit extension. Also, if Congress fails to pass a budget in time, the terms of the House offer would then call for lawmakers to stop receiving pay, just as the nation would then again face the threat of a default. Republicans say that the budget would only include an extended debt-ceiling increase if Democrats agree to significant spending cuts.


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“The Democratic-controlled Senate has failed to pass a budget for four years. That is a shameful run that needs to end, this year,” House Speaker John A. Boehner (R-Ohio) was to tell members of the GOP conference, according to prepared remarks. “We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem. The principle is simple: no budget, no pay.”

The party leaders hinted at the strategy Thursday, borne out of the bruising fiscal cliff battle in December that divided the House majority. It would push off the most immediate of three coming fiscal battles, which also include automatic across-the-board spending cuts and the expiration of the resolution that funds the government’s operations.

President Obama has maintained that extending the nation’s debt limit was non-negotiable, warning that the failure to do so threatened the nation’s long-term credit rating. At a news conference earlier this week, Obama called it “absurd” that Republicans would refuse to “pay the bills they’ve already racked up.”

“It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession, and ironically, would probably increase our deficit,” he said.

House leaders have used their time in Williamsburg, Va., to recalibrate their approach to negotiations. In a series of sessions on the grounds of a golfing resort, party leaders including Rep. Paul D. Ryan (R-Wis.), the chairman of the House Budget Committee and former vice presidential candidate, discussed the need to focus on reaching the achievable rather than the ideal when it comes to spending reduction goals, recognizing the party controls only the House, with a Democratic-led Senate and White House.


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House Majority Leader Eric Cantor (R-Va.) said in a statement that the GOP proposal “is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions for our families and children.”

“It’s time to come together and get to work,” he said.

Senate Majority Leader Harry Reid (D-Nev.) welcomed the move.

“It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage,” the Nevada Democrat said in a statement. “If the House can pass a clean debt ceiling increase to avoid default and allow the United States to meet its existing obligations, we will be happy to consider it.”

The White House signaled that it was “encouraged” to hear the news from House leadership.

“We are encouraged that there are signs that Congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on,” its statement said.

[For the Record, 11:35 a.m. PST Jan. 18: This post has been updated to include the White House’s response.]

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