April 11, 2011 in Nation/World

Debt ceiling debate looms

White House says limit must go up; GOP vows hard line
David Goldstein McClatchy

WASHINGTON – House Republicans, fresh from their showdown with Democrats over cuts in the current federal budget, promised Sunday to take an even tougher stand on spending next month when Congress will be asked to increase the amount of money the government is allowed to borrow.

House Majority Leader Eric Cantor of Virginia and Budget Committee Chairman Paul Ryan of Wisconsin warned that the GOP won’t approve raising the debt ceiling unless that increase is accompanied by both spending cuts and budget priorities.

Now at nearly $14.3 trillion, the national debt will hit its legal limit in the weeks ahead. Raising the debt ceiling is critical because without a higher limit, the government would not be able to borrow money to cover its expenses – including money needed to pay off earlier debt that has come due.

How to cut government spending is likely to dominate national politics through the 2012 elections, with the focus now turning to both the battle over the debt ceiling and the federal budget for fiscal 2012.

White House officials said President Barack Obama will weigh in on that fight this week, presenting his long-term debt reduction plan Wednesday in a speech that will also include his insistence that the nation cannot afford to continue tax breaks for the wealthiest Americans.

There was “no way” House Republicans would support an increase in the debt ceiling without “guaranteed steps to ensure that the spending doesn’t get out of control again,” Cantor said on “Fox News Sunday.”

Ryan, appearing on NBC, said, “We believe accompanying any debt ceiling (increase), you need real fiscal reforms, real spending cuts and real spending controls going forward.”

Both parties claimed victory in the fight over the 2011 budget. With $38 billion in spending cuts through September, Republicans won more than half of the $61 billion they wanted, but Democrats avoided GOP-backed policy changes, including eliminating spending for Planned Parenthood, that they said were ideologically driven.

White House adviser David Plouffe warned that any effort by Republicans not to raise the debt ceiling would have dire economic consequences.

Without a higher limit, the U.S. could default on payments owed on previous debt, which would damage the nation’s creditworthiness and raise the cost of borrowing for the government and private business alike.

“We should not be playing brinksmanship with the full faith and credit of the U.S.,” Plouffe said.

A fight, however, seemed certain, with the debt ceiling becoming a Republican bargaining chip for more spending cuts and other changes.

Ryan called for “real caps on spending … so we can take the pressure off the debt.”

Republicans have criticized the president for not presenting a comprehensive debt-reduction plan when he outlined his 2012 budget this year. They put forward Ryan’s detailed plan, which would drastically reorder the scope of the federal government by lowering the top tax rates for corporations and individuals, while fundamentally shrinking the federal role in providing health care to the poor, disabled and the next generations of seniors.

“We want to move from talking about saving billions of dollars to going on and saving trillions of dollars,” Ryan said on “Meet the Press.”

Congress is set to vote this week on $38 billion in budget cuts agreed to Friday night.

Details of the cuts, perhaps the largest spending reduction package in history, were being prepared in advance of today’s filing of the legislation.

But even before it is complete, Congress will turn its attention to the 2012 budget.

Obama’s decision to engage in the budget battles through his address on Wednesday reflects a move by the administration to exert an early influence on the terms of the debate.

“You’re going to have to look at Medicare and Medicaid and see what kind of savings you can get,” Plouffe said.

Ryan’s budget, being rushed through the House, proposed major changes to these longstanding federal programs.

Tribune Washington bureau contributed to this report.

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