GOP threatens to force America into default if Dems refuse major spending cuts
WASHINGTON – The grueling 2011 budget debate that brought the federal government to the brink of a shutdown might end up looking mild in the face of the next fiscal battle: the debt ceiling. That’s because Republicans are openly threatening to use the calamitous possibility of a U.S. default as leverage to exact major spending cuts from Democrats.
“The president says, ‘I want you to send me a clean bill.’ Guess what, Mr. President. Not a chance you’re going to get a clean bill,” said House Speaker John Boehner (R-OH), the most powerful Republican in D.C., at a fundraiser this weekend. “There will not be an increase in the debt limit without something really, really big attached to it.”
If it wasn’t clear what Boehner was referring to, House Majority Leader Eric Cantor (R-VA) said it plainly on Fox News Sunday: “[T]here is no way that we Republicans are going to support increasing the debt limit without guaranteed steps being put in place to ensure that the spending doesn’t get out of control again.”
Calling it a “leverage moment,” Cantor said Republicans will demand “spending caps, entitlement reform, budget process reforms — these are the kind of things that we’re going to have to have in order to go along with the debt limit increase.”
Other Republicans have likewise rebuffed White House requests for an up-or-down vote on the debt limit.
Treasury Secretary Tim Geithner warned last Monday that the U.S. would likely reach its $14.3 trillion debt ceiling by May 16, and have “no headroom” to borrow by July 8 even under extraordinary measures if Congress fails to increase the limit.
Geithner said that failure to act in time could incite “a financial crisis potentially more severe than the crisis from which we are only starting to recover.”
Sen. Chuck Schumer (D-NY), who helms policy and messaging for Democrats, accused the speaker of playing a dangerous game for political ends.
“Speaker Boehner had to keep [the budget] negotiations going to the last minute to show the Tea Party people he was doing everything he could,” Schumer said of last week’s debate over the fiscal 2011 budget. “You cannot do that with the debt ceiling. That is playing with fire — because if the markets believe we are not going to pay our debt, it could be a formula for recession or worse.”
“[I]f we have learned anything from the budget negotiations, it’s that the American people didn’t like the GOP’s threats to shut down the government,” added Jon Summers, a spokesman for Senate Majority Leader Harry Reid (D-NV), in an e-mail to Raw Story. “And they won’t take too kindly to threats of putting America into default — which would have a devastating effect on the global economy.”
A preview of what Republicans may push Democrats into supporting could be the proposal offered by House Budget Committee Chairman Paul Ryan (R-WI), which aims to slash $6 trillion in federal spending over ten years, including significant reductions to Medicare and Medicaid benefits.
Yet the underlying GOP accusations that Democrats aren’t committed to addressing the deficit comes with the irony that the bulk of the nation’s debt was accumulated last decade under a Republican White House and Congress in the form of unfunded tax cuts, two wars and a Medicare prescription drug program.
“Democrats don’t need lessons in cutting deficits from Republicans who allowed the last president to turn a record budget surplus into record deficits,” Summers said. “We will continue to work with Republicans on responsible solutions that cut spending while protecting our fragile economic recovery.”
[Image via SpeakerBoehner, Creative Commons licensed]