US will hit debt ceiling regardless of which party’s budget is chosen

Republicans say they are tired of raising the debt limit — but they’ll have to do it again. Their own budget proposals demand it.

While Republicans have blasted President Obama’s fiscal 2012 budget for failing to get the deficit under control, a pair of GOP plans released this week made clear more debt will be coming no matter which approach is adopted.

{mosads}The budget proposal unveiled Tuesday by House Budget Committee Chairman Paul Ryan (R-Wis.) would not balance the budget until 2040, and the even-more-conservative option offered Thursday by the Republican Study Committee would not balance it until 2020.

“Everyone agrees that we will be passing or having to pass additional debt limit increases … regardless of whose budget you look at,” said Rep. Scott Garrett (R-N.J.), the author of the RSC proposal.

“We wish we could cure this overnight, but it doesn’t appear we’re able to do that,” said Rep. Randy Neugebauer (R-Texas).

However, Republicans insist that budget realities will not change the framework of the upcoming debate on raising the $14.3 trillion debt ceiling, which promises to be even more bruising than the just-settled fight over funding the government for the rest of this fiscal year.

In one corner, the Obama administration, led by Treasury Secretary Timothy Geithner, is warning that a failure to hike the debt ceiling quickly would lead to an unprecedented default of U.S. debt that would cause a global economic crisis.

In the other, Republicans are saying they won’t approve a debt ceiling increase unless their demands on balanced budget amendments, spending caps and other permanent changes to the way the government spends money are met.

“What the vote really boils down to is convincing members that we want to put these things in place,” said Neugebauer. “Every one of these [votes] is an opportunity to move what we think are the principles … we need to put in place to get our hands around this deficit.”

“All along, pretty much everybody over here said that if there’s going to be an increase in the debt limit, there has to be some serious spending reductions or reforms,” said a House GOP aide. “The line has been, ‘Look, if you actually want this to get an affirmative vote, things are going to have to happen.’”

Garrett characterized that as “something that will stop the hemorrhaging, stop the spending.”

Even as congressional leaders agreed to a deal Friday night to prevent a government shutdown, GOP lawmakers were already setting up the debt ceiling to be the next major battle.

Rep. Mike Pence (R-Ind.) said the fight over spending for the rest of the year is a taste of fights to come.

“This little battle does have implications for the major battles over the budget, over the debt ceiling,” he said on Fox News’ “Hannity” show.

“The debt limit is a bigger, more important fight that we ought to be focusing on right now, and really not wasting all this time on what, comparatively, is a smaller matter,” said Sen. Patrick Toomey (R-Pa.) Friday on MSNBC’s “Morning Joe.”

In the Senate, every Republican member has signed on to a balanced- budget amendment that would cap federal spending at 18 percent of the nation’s gross domestic product and require a two-thirds vote in Congress to increase taxes.

It appears as if Republicans are not simply willing to let the slim Democratic majority pass a debt limit boost on their own. Sens. Mike Lee (R-Utah) and Jim DeMint (R-S.C.) have vowed to filibuster any increase, meaning Democrats would need some GOP support to clear the 60-vote hurdle. DeMint said he would not work on a debt ceiling increase until a balanced budget amendment is passed.

Meanwhile, Geithner has repeatedly warned lawmakers that they must raise the federal debt limit as soon as possible to avert an economic disaster. But thus far, his comments do not appear to be winning over Republicans.

Geithner told lawmakers in a letter Monday that the government will hit the debt ceiling by May 16 and will exhaust all ways to avoid a default by July 8. In it, he warned that the fallout from such an eventuality would dwarf the 2008 financial crisis.

In his push to impart the severity of failing to raise the debt limit, Geithner has enjoyed backing from some heavyweights in the financial sector: Federal Reserve Chairman Ben Bernanke and Wall Street titan Jamie Dimon, the chairman and chief executive officer of JP Morgan Chase & Co. Both of them, in separate statements, have echoed Geithner’s warning by using the same word to describe the government hitting the limit: “catastrophic.”

 Republicans have downplayed the issue, insisting there is flexibility to be had and room for negotiation.

“The threat of the debt limit, we know, is always one that the administration throws out early,” said Garrett.

But he added, no Republicans “are fooled into thinking” they have to increase the limit as soon as possible to avert catastrophe.

“There’s a lot of avenues for the secretary to use to push back the date,” he said.

“The tactics of trying to scare people is one of the political tactics that are used up here, but I think Republicans are very focused,” said Neugebauer.

One GOP aide noted the administration warned of dire consequences in previous pushes for programs like the Troubled Asset Relief Program and the stimulus package, dismissing them as “Chicken Little pronouncements.”

Bolstering Republican resolve is support from the Tea Party. Pushing the GOP to electoral success in 2010, Tea Partiers are now drawing a hard line in the sand on the debt limit.

“Right now, we don’t want to see it go up at all,” said Jenny Beth Martin, co-founder and national coordinator of the Tea Party Patriots, who said conservative activists “will be keeping a close eye” on how lawmakers respond to the debt limit debate.