House Republicans are prepared for a Tuesday vote on their signature debt-reduction plan that calls for a balanced-budget constitutional amendment, despite Democratic opposition and a White House veto threat.
Meanwhile, Senate party leaders said Monday they will keep their members in session every day - including weekends - until they agree to a compromise to increase the nation’s $14.29 trillion debt ceiling.
The House Republicans’ “cut, cap and balance” plan would raise the debt ceiling $2.4 trillion, but only after significant and immediate spending cuts and the adoption by Congress of a constitutional amendment requiring a balanced federal budget.
The measure is expected to pass the GOP-dominated House but stall in the Democrat-controlled Senate.
It’s “a common-sense proposal that will cut and cap federal spending to ensure that Washington begins to live within its means,” said House Majority Leader Eric Cantor, Virginia Republican.
The plan proposes $111 billion in cuts to the $3.6 trillion the federal government is projected to spend next year. About two-thirds of the cuts would come from department and agency budgets, with about one-third from automatically paid benefits - though Congress would have discretion on which programs to cut. Spending for defense, homeland security, military veterans, Medicare and Social Security would be exempted from the cuts.
The plan calls for a gradual decrease, or “cap,” in federal spending during the next decade - from 22.5 percent of the gross domestic product (GDP) next year to 19.9 percent in 2021.
The measure also would require Congress to balance the federal budget every year, permanently cap government spending at 18 percent of GDP after a phase-in period and require a two-thirds vote of the House and Senate to increase taxes.
The Republicans’ proposed $2.4 trillion increase in the debt ceiling is far less than the $4 trillion hike pushed by the administration.
White House press secretary Jay Carney derisively referred to the House GOP plan as “duck, dodge and dismantle,” saying it would lead to cuts in entitlement programs for seniors, middle-income Americans and the nation’s most vulnerable.
“What we are witnessing here with this measure is classic Washington posturing - Kabuki theater,” said White House Press Secretary Jay Carney during his Monday briefing with reporters. “It would essentially require the dismantlement of our social safety net - Social Security, Medicare and Medicaid.”
Mr. Carney said the president would veto the measure if it passed Congress.
House GOP leaders quickly shot back, with House Speaker John A. Boehner calling Mr. Obama’s veto threat “disappointing.”
“This unfortunate veto threat should make clear that the issue is not congressional inaction, but rather the president’s unwillingness to cut spending and restrain the future growth of our government,” the Ohio Republican said.
Time is running out on Congress to reach a compromise on increasing the debt ceiling - the government’s legal limit on how much money it can borrow to pay for operations and its debt obligations. The Treasury Department says it will run out of money to pay some of the government’s bills unless Congress agrees to increase the debt limit by Aug. 2 - a scenario it says could lead to a major economic crisis.
Senate party leaders say they’ll stay in session until a deal is reached.
“We’ve got a lot of things to do,” said Senate Majority Leader Harry Reid, Nevada Democrat. “This means Saturday and Sundays and Mondays that we have to be in session.”
The House Republicans’ plan isn’t the only debt-reduction proposal announced in recent days. Sen. Tom Coburn, Oklahoma Republican, on Monday released a plan to cut the deficits by $9 trillion during the next 10 years, including trillions of dollars in tax breaks.
Mr. Coburn’s plan calls for more than $1 trillion in defense cuts, $346 billion in agricultural subsidies and $409 billion to the Department of Education.
Another plan, unveiled last week by Senate Minority Leader Mitch McConnell, Kentucky Republican, would allow the debt to be increased up to $2.4 trillion, but would also shift the political peril for doing so onto the White House. While the proposal isn’t universally embraced, many speculate it could provide a basis for a final deal.
But some conservative activists and tea party groups have criticized the McConnell and House GOP plans for not cutting spending more.
“Boehner and McConnell are the predatory credit card issuers of the entitlement state. They’re about to renew Obama’s canceled MasterCard, and they want to saddle America’s grandchildren with all of the bills,” Judson Phillips, founder of Tea Party Nation, said in a prepared statement Monday.
“A failed [cut, cap and balance] bill gets you no cover.”