House Speaker John Boehner said Tuesday that he will oppose any increase in the nation's borrowing limit unless Congress agrees to first slash spending, a move that promises a budget showdown with Democrats that could ultimately shut down the government.
"This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance," Boehner, R-Ohio, told a crowd at the Peter G. Peterson Foundation's annual Fiscal Summit in Washington.
Congressional Democrats quickly refuted the Republican leader for reviving demands that nearly shut down the government last summer and eventually lead to a downgrading of the nation's AAA bond rating.
Senate Majority Leader Harry Reid, D-Nev., said Boehner's ultimatum is further evidence that House Republicans are captives of a conservative Tea Party faction that is "driving them over a cliff."
Boehner pledged that the House would make the difficult cuts necessary to rein in federal spending before it agreed to allow the government to borrow more. He promised to extend tax cuts first instituted under former President George W. Bush, a move that would put pressure on Senate Democrats fighting for re-election in battleground states. And he called on the House to establish "an expedited process" that would allow Congress to start reforming the tax code as early as 2013
"If we do this right, this will be the last time we ever have to confront the uncertainty of expiring tax rates," Boehner said. "We'll have replaced the broken status quo with a tax code that maintains progressivity, taxes income once, and creates a fairer, simpler code."
Government officials are unsure exactly when the United States Treasury will reach the current $16.4 trillion debt ceiling -- the limit on how much money the government may borrow to keep operating. Some estimate that the government will run out of money by February 2013.
Congress must act before that limit is reached or the government would shut down.
The debate will not only pit Republicans against Democrats. It also is expected to divide Republicans between the establishment, which favors a quick resolution and avoids any threat of a shutdown or a bond rating downgrade, and Tea Party conservatives, who are pushing for deep budget cuts that have little chance of passing both the House and Senate.
Boehner signaled support Tuesday for the Tea Party faction, saying cuts must be as large or larger than any increase in the borrowing limit.
Congress last fought over the debt ceiling in August. At that time, the government came close to running out of money before congressional Republicans and the White House struck a deal that called for $1.2 trillion in cuts to be made later. But Congress has been unable to agree on how to make those cuts, further frustrating fiscal conservatives.
Sen. John Thune, R-S.D., said any debate over reforming the tax code will hinge on the outcome of the November election, when both the White House and control of the Senate are up for grabs.
"If it's a Republican president and a Republican majority in the Senate, my guess is it's going to be a lot of interest about trying to get into next year when we can really take it on and solve it in a comprehensive way and do something about tax reform," Thune said.