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Congressional Republicans know they can’t stop a tax increase — but they’ll be damned if they let President Barack Obama get a debt limit increase for free.
The statutory ceiling on the U.S. debt, according to GOP lawmakers, staff and conservative interest groups, remains their strongest leverage in getting the president to come to the table with deeper spending cuts — now and in the future. And Obama, in his opening offer in fiscal cliff negotiations, proposed eliminating the need for Congress to affirmatively raise the ceiling, arguing politics should not affect whether the U.S. government meets its obligations.
But since the president made that offer, Republicans have dug in on the issue, becoming almost preoccupied by their need to preserve that point of leverage during Obama’s second term.
“It’s all our guys want to talk about,” one senior Senate Republican aide said. The aide noted that Democrats should not misjudge the GOP’s willingness to hold the debt limit hostage and that the party will be in no mood to compromise on the issue if Obama keeps insisting on a massive tax increase.
Sen. Rob Portman, former director of the Office of Management and Budget, defended using the debt limit as a legitimate tool to extract fiscal changes. The Ohio Republican said that’s the only thing that’s worked in recent decades to bring deficits under control — though he acknowledged it caused disruption in 2011. Portman appealed to Obama to come to the table, noting that the rest of his agenda — from immigration to spending ideas — will rely on having a working relationship with the GOP.
“He’s going to have to work with John Boehner, and he’s going to have to work with us,” Portman said.
So far, Speaker John A. Boehner, R-Ohio, has stuck to the Boehner rule — a demand that any debt increase be accompanied by an equal dollar amount of cuts or changes. Backing down from that position would be difficult for a restive GOP caucus already smarting from a showdown on taxes that it is likely to lose.
The political risks of repeating the 2011 debt ceiling strategy are obvious — the GOP’s Wall Street allies have no desire for an encore of the drama, which led to a downgrade in the U.S. credit rating by Standard & Poor’s. Federal Reserve Chairman Ben S. Bernanke warned Wednesday that business investment and hiring decisions were already being affected by the uncertainty surrounding the cliff talks, and he has said a debt limit default would be calamitous.