WASHINGTON — Seeking to regain their budget footing against President Barack Obama, Republicans controlling the House are moving quickly to try to defuse a potential debt crisis with legislation to prevent a first-ever U.S. default for at least three months.
The Republicans are giving up for now on trying to extract spending cuts from Democrats in return for an increase in the government’s borrowing cap. But the respite promises to be temporary, with the stage still set for major battles between the GOP and Obama over taxes, spending and deficits.
The first step will come today with a House vote on GOP-sponsored legislation that would give the government enough borrowing leeway to meet three months’ worth of obligations, delaying a showdown next month that Republicans fear they would lose.
While it’s assumed that the Treasury Department wouldn’t allow a disastrous default on U.S. Treasury notes, the prospect of failing to meet other U.S. obligations, such as unemployment benefits and Social Security checks, could be reputation-shattering.
House Speaker John Boehner and other GOP leaders have made it plain they don’t have the stomach for it.
The legislation is disliked by many Democrats, but the White House weighed in Tuesday with a statement that the administration would not oppose the measure.
It also appears that Senate Democrats will grudgingly accept the bill, which Majority Leader Harry Reid, D-Nev., called “a big step in the right direction” since the three-month GOP debt measure isn’t conditioned on a dollar cut in spending for every dollar of new borrowing authority as Boehner has long demanded.
“The Boehner rule of 1-for-1, it’s gone,” said Sen. Charles Schumer, D-N.Y.
The idea driving the move by GOP leaders is to re-sequence a series of upcoming budget battles, taking the threat of a potentially devastating government default off the table and instead setting up a clash in March over automatic across-the-board spending cuts set to strike the Pentagon and many domestic programs.
Those cuts, postponed by the recent “fiscal cliff” deal, are the punishment for the failure of a 2011 deficit supercommittee to reach an agreement.
These across-the-board cuts would pare $85 billion from this year’s budget, after being delayed from Jan. 1 until March 1 and reduced by $24 billion by the recently enacted tax bill.