Treasury Secretary Timothy Geithner wants Congress to raise the debt limit again later this year “without drama, pain and damage.”
House Speaker John Boehner has other ideas.
In remarks at the 2012 Peter G. Peterson Foundation, Boehner will erect the same requirements for raising the debt limit this coming winter that nearly led the country to default on its debt last August.“We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction,” Boehner will say according to excerpts of prepared remarks provided by his office. “That night in New York City, I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase…. When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance. If that means we have to do a series of stop-gap measures, so be it – but that’s not the ideal. Let’s start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must.”
There’s a bit of wiggle room here, as is often the case when these lines are drawn — cuts and reforms, not just cuts.
But the key is that Boehner will once again use the looming lapse of the nation’s borrowing authority to force further cuts to domestic programs. And he’ll still be presiding over a majority — albeit a lame duck majority — that’s hostile to even modest new tax revenues.
The big unknown, of course, is the election. Treasury expects to hit the debt ceiling in December, just weeks before the Bush tax cuts, the payroll tax holiday, and emergency unemployment benefits are set to expire and deep automatic domestic and defense cuts are set to take effect. Congress will be under immense pressure to avoid that fiscal cliff — and legislators in both parties have suggested it’s likely Congress will extend this January 1 deadline while laying the groundwork for passing a a mix of tax and spending measures early in 2013. The nature of that groundwork will depend in large part on who wins in November.
Boehner’s requirement makes it harder for Congress to punt, but it could easily polarize legislators and set up a new round of dangerous brinksmanship with the country’s full faith and credit on the line.