Obama, GOP brace for fight over debt limit

Hayley Peterson

President Obama is bracing for an election-year confrontation with congressional Republicans over the need to again raise the nation's borrowing limit to avoid automatic budget cuts that lawmakers fear would gut the Pentagon's budget at a time of war.

Obama told House and Senate leaders at the White House Wednesday that he "refuses to allow a replay of last summer's self-inflicted fiscal crisis," in which the United States nearly defaulted on its debts because of partisan disagreements over spending cuts that led to a downgrading of the nation's credit rating, White House spokesman Jay Carney said.

House Speaker John A. Boehner, R-Ohio, had a day earlier insisted that Obama and congressional Democrats would have to agree to deep budget cuts and to extend tax breaks, even for the wealthy, if they wanted to strike a deal with Republicans to raise the debt limit. Boehner reiterated his position through a spokesman Wednesday.

"As long as I'm around here, I'm not going to allow a debt ceiling increase without doing something serious about the debt," Boehner said.

The debt ceiling battle is being revived because the U.S. is slated to reach its $16.4 trillion borrowing limit by the end of the year, according to Treasury Secretary Timothy Geithner. If Congress doesn't raise the limit before then, $1.2 trillion in spending cuts will automatically kick in, with half of those cuts coming out of the defense budget.

But Obama made it clear to Boehner and other congressional leaders that he has no intention of tying the debt ceiling to a deal on spending cuts and tax breaks, according to a Boehner aide. Carney said Obama rejects "an approach that asks middle-class families and senior citizens to make sacrifices without asking for anything more from millionaires and billionaires."

"We're not going to recreate the debt ceiling debacle of last August," Carney said. "It is simply not acceptable to hold the American and global economy to one party's ideology."

The national debt tripled over the last decade, and the White House insists that the "balanced approach" to dealing with it must include tax increases for the wealthiest taxpayers. That's the same argument Obama made last year when he and Boehner deadlocked over raising the debt limit.

Though he eventually struck a deal with Republicans that raises the borrowing limit, Obama angered his own supporters last year by agreeing to extend tax cuts for wealthy taxpayers and to reforms in entitlement programs like Medicare and Medicaid.

Another budget battle could reopen those rifts at a time when Obama needs his party solidly behind him heading into Election Day, analysts said.

Trying to get ahead of the looming battle, Obama called Boehner and other congressional leaders to the White House Wednesday, less than 24 hours after Boehner made it clear at a "fiscal summit" in D.C. that he is going to make spending cuts a central issue before Election Day.

"This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance," Boehner said. "Let's start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must."

View article comments Leave a comment