Boehner Says House Won’t Vote on Clean Debt Limit Bill

U.S. House Speaker John Boehner said the Republican-controlled chamber can’t pass an increase to the U.S. debt ceiling without packaging it with other provisions -- something President Barack Obama has labeled a nonstarter.

“We are not going to pass a clean debt limit,” the Ohio Republican said yesterday in an interview on ABC’s “This Week” program. “The votes are not in the House to pass a clean debt limit.”

Boehner said the U.S. might end up in default if Obama doesn’t negotiate. “That’s the path we’re on,” he said.

The stalemate between the White House and House Republicans showed little sign of thawing 10 days from when Treasury Secretary Jacob J. Lew says the U.S. will exhaust measures to avoid breaching the debt ceiling.

While Obama will negotiate on budget details or to strengthen the Affordable Care Act, he “is not going to sanction negotiations with any faction that are using the threat of default as a way of extracting policy in our democracy,” Gene Sperling, director of the president’s National Economic Council, said today at a breakfast sponsored by Politico.

‘Negative Event’

Should Congress fail to pass a debt-ceiling increase that the president can sign, the ensuing default would be an “extraordinarily negative event for our economy” and the world, Sperling said. He said he’d prefer to see the debt limit raised long term, though didn’t rule out a temporary increase.

Stocks declined today as concern about the lack of progress toward a resolution hit markets around the world. The MSCI All-Country World Index slid 0.7 percent to 381.24 at 9:30 a.m. in New York while the Stoxx Europe 600 Index and Standard & Poor’s 500 Index sank 0.7 percent each. The 10-year Treasury yield fell four basis points to 2.61 percent. West Texas Intermediate oil slipped 1.8 percent.

Obama, in an interview with the Associated Press published Oct. 5, said he expects Congress agree to raise the nation’s $16.7 trillion debt limit in time to avert a default.

Boehner said the president first needs to compromise.

“The nation’s credit is at risk because of the administration’s refusal to sit down and have a conversation,” Boehner said. Asked if he’d consider putting a debt-ceiling increase without add-ons on the floor, Boehner said the House would not be “going down that path.”

Democratic Votes

Boehner said on ABC he doesn’t intend to let the government default and he has told his members the same thing behind closed doors, even if it involves using Democratic votes, according to aides and lawmakers.

Still, the speaker has stuck to a hard line as he works to keep the Republicans unified and extract concessions from Obama. So far, that approach hasn’t yielded any talks with Obama or movement toward heading off a default.

“We’re not going to resolve this without the president engaging in it,” Texas Senator John Cornyn, the second-ranked Republican in the chamber, said yesterday in an interview on CBS’s “Face the Nation.”

Lew, who made appearances yesterday on four of the major Sunday television talk shows, said the administration would only be willing to negotiate after the partial shutdown, now in its sixth day, comes to an end and the debt ceiling is increased. He also warned of the dangers of default.

Paying Bills

“I’ve talked with John Boehner; I know he doesn’t want to default,” Lew said on “Fox News Sunday.” “He also didn’t want to shut the government down. And here we are with a government shutdown.”

The U.S. will run out of borrowing authority on Oct. 17 and will have about $30 billion in cash after that. The country would be unable to pay all of its bills, including benefits, salaries and interest, sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

“Congress is playing with fire,” Lew said on CNN’s “State of the Union.”

Unlike past fiscal feuds, this dispute is more about Obama’s Affordable Care Act, his signature health-care law, and less about the amount of spending. The U.S. budget deficit in June was 4.2 percent of gross domestic product, down from 10.1 percent in February 2010 and the narrowest since November 2008, when Obama was elected to his first term, according to data compiled by Bloomberg from the Treasury Department and the Bureau of Economic Analysis.

Catastrophic Consequences

The consequences of a U.S. government default caused by Congress failing to raise the debt limit could be catastrophic and might last decades, the Treasury Department said in an Oct. 3 report.

“Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket,” the Treasury said. “The negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”

Boehner said Obama needs to start a conversation about the drivers of the country’s debt -- entitlement programs such as Medicare and Social Security -- before he could pass an increase in the debt ceiling.

“I don’t want the United States to default on its debt,” he said. “But I’m not going to raise the debt limit without a serious conversation about dealing with problems that are driving the debt up.”

2011 Debate

Obama, who negotiated with Boehner over possible changes to entitlement programs during the 2011 fiscal debate, has said he’ll be willing to negotiate after the shutdown ends and the debt ceiling is increased. Obama included changes to cut the costs that come from Social Security and Medicare in his budget plan, which was released in April.

“We are happy to negotiate, but we want to negotiate without a gun to our head,” Senator Charles Schumer of New York, the third-ranked Democrat in the chamber, said in a separate interview yesterday on ABC.

Schumer called Boehner’s position on raising the debt limit “posturing” and said he thought the pressure on Boehner and House Republicans coming from the business community and constituents would make them “have to back off.”

Schumer, along with fellow Democrats and administration officials, also questioned Boehner’s statement that a clean bill to fund the government wouldn’t have the votes in the House, underlining a push from Senate Democrats and the White House to pressure Boehner to put that bill up for a vote.

Stopping ‘Games’

Adam Jentleson, spokesman for Majority Leader Harry Reid, a Nevada Democrat, said Boehner is “saying things that fly in the face of the facts or stand at odds with his past actions.”

“Today, Speaker Boehner should stop the games and let the House vote on the Senate’s clean CR so that the entire federal government can re-open within twenty-four hours,” Jentleson said in a statement, referring to a continuing resolution to authorize government spending.

Boehner has been holding regular closed-door meetings with his members, asking them to stick together as they get close in on the debt-ceiling deadline. The House has passed a series of smaller funding bills for specific parts of the government, including the National Institutes of Health and national parks.

House Republicans have rebuffed calls from Democrats to put a “clean” bill on the floor to fund the government at the level it was at prior to the partial shutdown.

Debt Strategy

As he puts together the debt-ceiling plan, Boehner has little room to maneuver. Republicans have a 232-200 majority in the House, which means that they can lose support from only 15 of their members on a bill that doesn’t attract any Democrats.

Last month, Boehner, 63, outlined a debt-limit increase strategy that also included lighter regulations, cuts in entitlement programs and approval of TransCanada Corp.’s Keystone XL pipeline.

The outline included means-testing Medicare, reducing the changes to malpractice law and eliminating social services block grants. Also being considered was a proposal to eliminate a requirement that gives regulators authority to seize and dismantle financial firms if their failure could damage the stability of the U.S. financial system.

Representative Paul Ryan, a Wisconsin Republican and his party’s 2012 vice presidential candidate, has also been pressing for a plan that would solve the government spending impasse and raise the debt-limit at the same time while implementing economic growth policies and extracting deeper entitlement cuts as some in the Republican conference complained the leaders’ initial outline did not go far enough.

Boehner, both yesterday and in a closed door meeting with Obama and congressional leaders last week, has called for the Obama administration to allow Ryan, the Budget Committee Chairman, and Democratic Senator Patty Murray, the Senate’s budget panel chairwoman, to negotiate over a broader fiscal package.

(Corrects figure on budget deficit as a percentage of GDP in 18th paragraph. For more on the U.S. government shutdown, see EXT2.)
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