Boehner rejects Obama's debt plan

  • Article by: CARL HULSE , New York Times
  • Updated: July 9, 2011 - 9:15 PM

Speaker wants $2 trillion deal -- rather than broader $4 trillion deal -- focused on cuts, not taxes.

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President Obama and House Speaker John Boehner, R-Ohio

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WASHINGTON - Citing differences over tax revenue, House Speaker John Boehner said Saturday night that he would pull back from joint efforts with President Obama to reach a sweeping $4 trillion deficit-reduction plan tied to a proposal to increase the federal debt limit.

On the eve of a second round of high-level bipartisan talks set for Sunday, Boehner issued a statement saying he would urge negotiators to focus on a package more in line with the $2 trillion to $3 trillion in spending cuts and revenue increases negotiated earlier by Vice President Joe Biden.

"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Boehner said. "I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."

Aides said the speaker and the president spoke by telephone before Boehner's statement was released.

The decision was a major reversal for Boehner, a veteran congressional dealmaker who along with Obama had been the major advocate for seeking a far-reaching deal that would have combined a debt limit increase with substantial spending cuts; significant changes in social programs like Medicare, Medicaid and perhaps Social Security; and as much as $1 trillion in new revenue. After a secret meeting between them last weekend, Obama went public with his own call for a broad package.

White House response: Not giving up

The White House followed Boehner's announcement with a statement suggesting that the president would try to change Boehner's mind Sunday.

"Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington," Dan Pfeiffer, the White House communications director, said. "The president believes that now is the moment to rise above that cynicism and show the American people that we can still do big things. And so tomorrow, he will make the case to congressional leaders that we must reject the politics of least resistance and take on this critical challenge."

But the prospect of getting the bulk of his own Republican majority behind a $4 trillion, 10-year agreement was looming as a very heavy political and policy lift for the speaker, who is still in his first year in the position.

Stiff resistance from Republicans

As potential elements of the plan became public, Boehner was encountering stiff resistance from fellow Republicans determined to oppose any package containing proposals that could be construed as a tax increase, worried that such a deal could cost the party dearly in the 2012 elections. In the initial White House talks Thursday, Rep. Eric Cantor of Virginia, the No. 2 House Republican, pushed for a midrange agreement.

Even if the two sides can reach a compromise to increase the $14.3 trillion debt limit, the extension would probably only carry the government through November 2012.

The decision by Boehner will probably stiffen Democratic resistance to significant cuts in entitlement spending on programs like Medicare. While Democrats were rattled by Obama's push for a deficit-reduction plan that would trade cuts in social spending for new revenue, party leaders seemed willing to entertain the idea as part of an agreement that would resolve spending disputes for years to come. But many Democrats saw agreeing to Medicare cuts as undermining their political case against the House Republican plan to turn over the program to private insurers and provide subsidies for older Americans.

Boehner was not specific about what tax issues led to the impasse, but a Republican familiar with the talks said an exchange of proposals between the speaker and the White House was unable to resolve disagreements over the "core elements" of the Republican proposal on tax reform. The Republican said differences also remained over changes in the social programs.

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