The Speaker of the U.S. House of Representatives, John Boehner, says he stands ready to cut a budget deal with President Barack Obama - so long as no taxes are raised, leaving deep spending cuts as the sole vehicle to trim America’s massive $1.5-trillion federal deficit. Meanwhile, budget negotiations continue as the nation nears a congressionally-imposed limit on federal borrowing and the specter of default on a $14-trillion national debt looms.
Boehner says he is eager to reach a budget agreement with Democrats and the White House immediately.
“I am ready to cut the deal today. We do not have to wait until the eleventh hour.”
But, appearing on CBS’ Face the Nation program, Boehner held firm to a bedrock Republican principle: the path to fiscal health lies in federal spending cuts, not tax hikes.
“Everything should be on the table except raising taxes, because raising taxes will hurt our economy and hurt our ability to create jobs in our country.”
And so the partisan budget standoff continues. Democrats agree on the need to rein in spending, but insist that a combination of budget cuts and higher taxes on top earners would provide the greatest deficit reduction without decimating federal programs that benefit the poor and vulnerable.
Democratic Senator Richard Durbin of Illinois spoke on Fox News Sunday.
“I think we do have to cut spending. But we also have to take a look at revenue and the entitlement programs.”
So-called entitlement programs provide access to health care and income for retirees, and are seen as the main culprit for America’s long-term fiscal imbalance.
Republicans have proposed ending a direct federal role in some of those programs, transferring responsibility to individual states with reduced federal backing. Democrats have agreed to entitlement reform in principle, but have yet to put forward a detailed plan for doing so.
Meanwhile, the United States will soon bump up against a limit on federal borrowing. Unless Congress agrees to raise the debt ceiling, America could default on its mammoth national debt, much of which is owed to foreign governments.
Appearing at a CBS-News-sponsored town-hall meeting last week, President Barack Obama explained what is at stake.
“The way the federal government finances itself is we sell debt to investors, other countries, et cetera, through Treasury bills. And if at any point somebody thought, if investors around the world thought the full faith and credit of the United States was not being backed up, if they thought we might renege on our IOUs (Treasury bills), it could unravel the financial system. We could have a worse recession than we already had, a worse financial crisis than we already had.”
The president wants the debt ceiling raised regardless of how budget negotiations proceed. Republicans, as Boener pointed out, are insisting on major spending cuts as a condition of voting to increase the borrowing limit.
“Our obligation is to raise the debt ceiling, but to raise the debt ceiling without dealing with the underlying [fiscal] problems is totally irresponsible.”
Congress has never failed to raise the debt ceiling in the past, usually after weeks of partisan rhetoric and finger-pointing.