House Speaker John Boehner said Monday night that President Obama must agree to more than $2 trillion in spending cuts in exchange for a vote to increase the debt ceiling enough to cover U.S. obligations through the end of next year.
In a change of tone from the previously somewhat conciliatory search for commonality, Boehner also strongly rejected any move to increase taxes. The Washington Post reported that Boehner also indicated that Republicans expected immediate, and major, spending cuts to be enacted.
In a speech at the Economic Club of New York, Boehner said, “Without significant spending cuts and changes in the way we spend the Americanpeople’s money, there will be no increase in the debt limit. And the cuts should be greater than the accompanying increase in the debt limit that the president is given. We’re not talking about billions here. We should be talking about cuts in trillions if we’re serious about addressing America’s fiscal problems.”
The national debt limit of $14.3 trillion will be reached within the next week, absent any action from Congress to raise it, and Republican aides indicated that lesser spending cuts than those Boehner said he wanted could be acceptable if the period covered by the debt spending limit were shortened—resulting in multiple votes to extend the debt limit before the 2012 election. Many in both parties want to avoid that.
Treasury Secretary Timothy Geithner and other experts have said that a failure to raise the debt limit could be catastrophic if it means that the U.S. defaults on its obligations. Roger Altman, a private-equity investor who served in the Clinton Treasury Department, said in the report, “Default is the financial equivalent of suicide.”
But Boehner said in his speech that borrowing would be just as bad. “It’s true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process.”
Democrats called Boehner’s approach reckless. Sen. Charles E. Schumer, D-N.Y., said that Boehner was “playing with fire” and risking repercussions in the markets by not saying he would approve a debt ceiling increase. Schumer also belittled Boehner for saying that there needed to be an “adult conversation” about the debt. “Speaker Boehner needs to have an adult moment right here and now,” Schumer said in the report.