Republicans mull ‘plan B’ to prevent debt limit crisis
WASHINGTON REPUBLICAN US House Speaker John Boehner said on Tuesday he sought a “Plan B” to avert a calamitous August debt default as lawmakers geared for a symbolic vote on a bill that called for draconian spending cuts.
“I have said for months that defaulting on our debt would be irresponsible,” Boehner told reporters as the Republican-led House of Representatives took up the “Cut, Cap, Balance” plan dear to the archconservative “Tea Party” movement.
“But just as irresponsible would be to increase the debt limit without taking serious action to reduce current spending and our long-term obligations,” the speaker said with just two weeks before an August 2 deadline.
The legislation calls for slicing some $111 billion from next year’s spending and capping government spending at one-fifth the size of the economy in a bid to shrink the US national debt, now at $14.3 trillion.
And it ties any increase in the debt ceiling to securing the two-thirds majorities needed in each chamber to send an amendment to the US Constitution requiring a balanced federal budget to the states for ratification.
But even if it cleared the House, it was nearly sure to die in the Democratic-held Senate and the White House has threatened to veto it, leaving cash-strapped Washington on course for a potential August 2 economic meltdown.
“I’m not going to give up hope on ‘Cut, Cap and Balance,’ but I do think it’s responsible for us to look at what Plan B would look like,” Boehner said when asked about alternatives.
“And the leadership had a long conversation yesterday about Plan B. There are lot of options available to us.
There have been no decisions made as yet,” said the speaker.
One option seemingly gaining ground in the polarized US Congress was an as-yet undisclosed blueprint being crafted by Republican Senate Minority Leader Mitch McConnell and Democratic Senate Majority Leader Harry Reid.
The plan would effectively let Obama raise the debt ceiling with just Democratic votes while letting Republican oppose the move with political but few practical consequences, according to aides who warned it was still in flux.
The plan would also call for as much as $1.5 trillion in spending cuts over ten years and set up a special commission of lawmakers empowered to propose more cuts that would get streamlined congressional consideration.
Conservative activists and lawmakers close to the “Tea Party” have denounced the initiative as giving Obama a free hand on the debt, but it was unclear whether they would be able to block it.
Washington hit its debt ceiling on May 16 and has used spending and accounting adjustments, as well as higherthan- expected tax receipts, to continue operating normally, but can only do so until August 2. Finance and business leaders have warned that failure to raise the US debt ceiling by then could send shock waves through a world economy still reeling from the 2008 collapse, while Obama has predicted economic “Armageddon.” Reid denounced the House Republican plan, charging its “arbitrary, reckless budget caps” would force painful cuts in social safety net programs dear to Democrats while blocking Obama’s calls for tax hikes on the rich.
“It does absolutely nothing to protect our economy from the kind of recession from which we are beginning to recover.
In fact, if the economy wasn’t already in a recession, experts say this legislation would quickly produce one,” he said.
McConnell urged on-thefence Democrats to back the plan, saying he believed “the reckless spending and debt of the past two years has brought us to the point of crisis.” “Something serious must be done to rein it without damaging a fragile economy with jobkilling taxes,” he said, reprising the core Republican argument that tax hikes on the rich will dry up investment.
Obama, whose 2012 reelection bid will turn on his handling of the US economy, won good marks from just 43 percent of the public for his approach to the debt standoff, while 48 percent disapproved, according to a CBS television poll.
But he fared better than Republicans, who faced 71 percent disapproval to just 21 percent approval for their role in the political struggle, according to the survey, which was released on Monday.