GOP scrubs bill for $65 billion in new cuts
After finding $65 billion in new spending cuts Wednesday, House Republican leaders braced for a floor showdown Thursday on their bill to raise the government’s borrowing limit by $900 billion while cutting even more than that from future spending.
And an intense closed-door meeting early Wednesday also seemed to win back many wavering Republicans, as party leaders warned of dire consequences should their bill fail, and also promised repeated votes on a balanced-budget amendment to the Constitution.
“The leader and speaker assured us that we will, and that we will have an opportunity to make that vote on the floor of the House. So I think you’re seeing a shift toward a more positive look at the bill, and I know probably 20 people who have gone from undecided or lean ‘yes’ to an actual ‘yes’ prior to the past couple of days, including me,’” said Rep. Tom Reed, a freshman Republican from New York.
GOP leaders hurriedly had rewritten their bill after the Congressional Budget Office (CBO) said earlier this week that their first version had only cut $850 billion — leaving them in violation of House Speaker John A. Boehner’s pledge to match a debt increase dollar-for-dollar with more spending reductions.
The moves came even as financial markets signaled they remain worried over the possibility of stalemate into next week, when the Treasury Department says the government would bump into its $14.29 trillion debt limit. If the limit isn’t raised by Tuesday, the government has said it would have to suspend payments on some obligations.
“Every Democratic senator will vote against it,” said the Nevada Democrat, and his pledge was backed up later in the day when all of the chamber’s Democrats signed a letter laying out their opposition.
Mr. Reid, though, was rewriting his own alternative on Thursday after the CBO said it, too, had a gap between projected savings and the requested debt increase. The CBO said the Senate bill reduced future projected spending by $2.2 trillion, but included a debt increase of $2.7 trillion, leaving a half-trillion-dollar gap, or 10 times the GOP’s shortfall.
Republicans are seeking to win deep spending cuts in exchange for raising the debt limit, and Democrats have as of late joined them in that mission. But the two sides disagree over how much new debt authority should be granted.
Democrats want a $2.7 trillion increase, which would last past the 2012 election and ensure lawmakers don’t have to face the issue again before they face voters.
The GOP, though, wants a two-step process: an initial increase that would last into next year, and then another increase if a proposed special committee came up with more spending cuts or tax increases.
All sides have agreed to the GOP’s demand that a debt increase be matched by spending cuts.
With stalemate a possibility, House Democrats cheered one of their leaders’ suggestions that Mr. Obama prepare an executive order to raise the limit unilaterally, citing the 14th Amendment’s clause that says U.S. debt shall not be questioned.
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