WASHINGTON – House Speaker John Boehner (R-OH) told reporters that the U.S. debt limit must be increased in the month of June, warning that delay could negatively impact financial markets.
“This really needs to be done over the next month if we are serious about no brinksmanship and no rattling investors,” Boehner said Wednesday after meeting with President Barack Obama, calling on the president to “engage himself” in the negotiations. “I’m willing. I’m ready. It is time to have the conversation. It is time to play large ball, not small ball.”
The remarks came on the day that U.S. stocks dropped by the highest figure in a single day since last August, suggesting growing signs of economic pessimism. Earlier this week the House struck down a “clean” debt limit increase, which Republicans pointed to as a sign that spending cuts are necessary to convince enough members of Congress to raise the ceiling.
Boehner’s comments are significant for two reasons: they reflect a clear admission that the limit must be increased, come what may. This goes against the stances of many in his GOP caucus, who dismiss warnings by the Treasury Department that the existing debt ceiling of $14.3 trillion must be raised by August 2 or the U.S. would start defaulting on its obligations and risk a financial calamity.
By insisting that a deal be struck by the end of the month, the speaker also endorsed the view that pushing the vote too close to the August deadline could spook the markets and adversely impact the economy. GOP leaders insist that there ought to be budget cuts as high or higher than the debt limit hike.
House Republicans have been negotiating with the White House since last week on what spending cuts should be included in the bill. Democrats have accused the GOP of taking the economy hostage by demanding that there be strings attached to the debt limit increase, which economists say is a necessity.