House Speaker John Boehner warned Tuesday that he won’t permit another increase in the debt ceiling without a larger amount of spending cuts and reforms approved in tandem.
“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 … to force the elected leadership of this country to solve our structural fiscal imbalance,” Boehner said at a fiscal summit sponsored by the Peter G. Peterson Foundation, according to prepared remarks.
In other words, welcome to deja vu all over again.
Boehner issued a similar warning at this time last year. The end result was a confidence-shaking showdown over the summer that resulted in the Budget Control Act, which calls for $2.1 trillion in spending cuts.
Looming battle over investment taxes
It also sparked the first-ever downgrade of the U.S. credit rating by Standard & Poor’s, which cited political brinksmanship as the chief cause. Boehner said Tuesday “we shouldn’t dread the debt limit” because it’s an “action-forcing event.”
“Yes, allowing America to default would be irresponsible,” he said. “But it would be more irresponsible to raise the debt ceiling without taking dramatic steps to reduce spending and reform the budget process.”
Boehner made clear that he wants tax reform that “lowers rates for individuals and businesses while closing deductions, credits, and special carveouts.”
While explicitly ruling out tax increases, he allowed that some taxpayers can end up with higher tax bills when breaks and loopholes are eliminated.
“Yeah, some may pay more and some may pay less,” Boehner said in a Q&A with CNN’s Erin Burnett.
In fact, that’s true of any tax reform. Republicans, however, don’t want tax changes to raise more revenue than the current system. But fiscal experts have said more revenue will be required to accomplish the scale of deficit reduction the country needs.
Despite drawing “a line in the sand” on the debt ceiling, Boehner seemed to signal that the debt ceiling would be raised, but that it might need to be done incrementally.
“If … we have to do a series of stop-gap measures, so be it — but that’s not the ideal,” he said.
Read the full story at CNNMoney