House GOP leaders drop threat of default on debt

WILLIAMSBURG, Va. – House Republican leaders abruptly announced they will vote next week to temporarily extend the nation’s debt limit, sharply reducing the threat that the government might default on its obligations, but leaving the party still divided as it casts about for the best way to pressure President Barack Obama for more budget cuts.

The move Friday by Republican leaders, who have been holed up for days at an annual retreat at a snow-dusted private resort in Virginia, is a turnaround for the party. Until recently, Republicans had touted the debt ceiling as a prime point of leverage they could use in their battle with Obama over spending.

Many Republicans, particularly in the House, are still smarting from the tax hikes on the wealthy the president won in the New Year’s Day “fiscal cliff” deal. They are primed to fight for cuts to Medicare and other domestic programs, while seeking to divert Obama from his own priorities on gun control and immigration.

But House Speaker John A. Boehner and other members of the leadership have been warning their restive members that a fight over the debt ceiling risked harm to the economy for which Republicans likely would receive the blame. They have been looking for a way to sidestep a battle that they feared could further damage the Republicans’ standing with voters.

The new plan would raise the debt limit, which currently stands at $16.4 trillion, for a few months in exchange for a promise that the Democrat-controlled Senate will not miss the traditional April 15 deadline to pass its budget – a habit that has irked conservatives. Instead of staging a spending fight over the debt ceiling, Republicans would aim at one of two budget deadlines coming up in March.

To compel senators to comply with the budget requirement, the plan calls for their pay to be withheld if the deadline passes without action. That provision, however, may not pass constitutional muster. The 27th Amendment provides that “no law, varying the compensation” of members of Congress can take effect until after an intervening election. The amendment was passed to prevent a Congress from voting itself a raise, but may also prohibit withholding a member’s pay, constitutional lawyers and some members of Congress said.

Even without the debate over pay, the proposal substantially departs from past Republican demands that any increase in the debt ceiling be matched, dollar-for-dollar, with spending cuts. That standard sparked a standoff in 2011 between Boehner and Obama that brought the nation to the brink of a first-ever credit default and launched today’s battles.

Some Democratic leaders in Congress panned the overture – Rep. Nancy Pelosi, D-Calif., the minority leader, called it a “gimmick” in a statement released by her spokesman. Senate Majority Leader Harry Reid of Nevada was noncommittal.

White House press secretary Jay Carney said, “We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage.”