Boehner: Spending cuts must offset debt limit hike

WASHINGTON – House Speaker John Boehner said Tuesday that when Congress raises the nation's borrowing cap he will again insist on spending cuts and budget reforms to offset the increase.

In remarks prepared for a budget address Tuesday afternoon, the Ohio Republican said he welcomes another wrenching debate on increasing the so-called debt limit because it forces a Congress and White House plagued by gridlock to make difficult decisions.

Boehner also said that the GOP-controlled House will vote to extend Bush-era tax cuts due to expire at the end of the year and that the House will act next year on "broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits and special carveouts."

According to Treasury Secretary Tim Geithner, the government will hit its borrowing cap late this year but Treasury can use accounting maneuvers to buy time for the newly elected Congress to deal with the issue early next year.

About a year ago, Boehner made a similar promise on the debt limit, which at the time was discounted by some in official Washington.

"When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase," Boehner said. "This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance."

Asked whether Obama agreed that any increase in the debt ceiling should be offset by an equal amount of spending cuts, White House spokesman Jay Carney said that scenario would present an ugly repeat of last year when Republicans held the U.S. government credit "hostage," as Carney put it.

"It can't possibly be the case that the right prescription for what we need to do right now is to engage in the kind of political brinksmanship that, unfortunately, congressional Republicans engaged in last year," Carney said. "So we're not going to do that."

Yet it was unclear how the White House could prevent it if the Republican-led Congress again insists on commensurate cuts. Carney said Obama would again demand balancing spending cuts with an increase in tax revenue, which Republicans have rejected.

Last year, Congress and President Barack Obama — with Boehner playing a lead role — agreed on a 10-year, $2 trillion-plus package of spending cuts the coming decade. The measure paired "caps" on domestic agency operating budgets with the promise of $1.2 trillion in further deficit cuts though a so-called deficit "supercommittee."

But the supercommittee's failure to reach a deal has forced a painful round of automatic spending cuts at the Pentagon and other Cabinet agencies next year, along with a 2 percent cut to Medicare providers. Lawmakers are already trying to unwind those cuts, which take effect in January.

Boehner seemed to warn that he won't permit such a scheme this time around.

"Just so we're clear, I'm talking about real cuts and reforms — not these tricks and gimmicks that have given Washington a pass on grappling with its spending," he said.