Boehner: Trillions in cuts needed to reduce deficit

U.S. House Speaker John Boehner gestures as he addresses the Economic Club of New York in New York, Monday, May 9, 2011. The Economic Club of New York is a non-political, non-partisan and non-profit organization with members from the executive levels of business, industry and finance. Its mission is to promote the study and discussion of social, economic, and political questions. (AP Photo/Kathy Willens)

The top Republican in Congress wants trillions of dollars in spending cuts as part of must-pass legislation allowing the federal government to continue borrowing to keep it operating and meeting obligations to investors. It’s a new, ambitious marker in a battle over the budget that’s expected to consume Congress for much of the summer.

House Speaker John Boehner also said that any legislation to raise the so-called debt limit beyond its current $14.3 trillion cap should be accompanied by spending cuts larger than the amount of the permitted increase in the debt.

The Ohio Republican made the comments in a speech Monday night to the Economic Club of New York. Boehner’s comments come as investors and business groups have been seeking assurances that the GOP-controlled House will join with President Barack Obama and the Democratic-led Senate to enact the must-pass debt limit measure, which is needed to prevent a market-roiling, first-ever U.S. default on its obligations.

Treasury Secretary Timothy Geithner says a failure to increase the federal government’s ability to borrow would have disastrous effects on the economy.

“It’s true that allowing America to default would be irresponsible,” Boehner said. “But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process.”

The government is headed toward a $1.6 trillion deficit this year requiring it to borrow more than $125 billion a month. It’s unclear how much of a debt limit increase is coming, but it would take a record increase in the $2 trillion range to avoid a second vote before next year’s elections. The most recent increase in the debt limit of $1.9 trillion was passed by a Democratic-controlled Congress early last year.

The debt measure’s path through Congress promises to be extraordinarily difficult since the arrival of 87 House GOP freshmen — many elected with tea party backing last year — for whom the debt vote is politically treacherous. At the same time, Democrats controlling the Senate and the White House support revenue increases that are a non-starter with Republicans.

Boehner’s remarks are notable since it’s virtually impossible to produce spending cuts of that size without addressing major benefit programs like Medicare, food stamps and Medicaid. And they came less than a week after Majority Leader Eric Cantor, R-Va., and other top Republicans seemed to acknowledge that political reality would probably rule out such cuts before the 2012 presidential and congressional elections.

A GOP budget blueprint that passed the House last month calls for transforming Medicare from a program in which the government directly pays medical bills into a voucher-like system in which future beneficiaries — those presently 54 years old or younger — would receive subsidies for purchases of private insurance plans.

Dozens of protesters gathered outside the hotel where the event was being held.

“We’re not talking about billions here. We should be talking about cuts in trillions,” Boehner said. “These should be actual cuts, real reforms to these programs and not broad deficit targets that punt the tough questions to the future.”

In fact, one of the options being considered by Republicans is to impose a hard cap on government spending that would be backed up with across-the-board spending cuts if the targets aren’t met. The idea is firmly opposed by the White House, which prefers a mechanism that would incorporate automatic revenue increases as well.

“Tax hikes should be off the table,” Boehner said.

Boehner called for “honest conversations” about the future of Medicare. He added that a failure to act could provoke a debt crisis that could require tougher cuts than anything now being contemplated.

“If we don’t act boldly now, the markets will act for us very soon,” Boehner said.

“We cannot let this moment pass,” he added.

Separately, Senate Budget Committee Chairman Kent Conrad, D-N.D., said it may require a short-term increase in the debt limit to buy additional time for lawmakers to grapple with what is likely to be a very complicated and politically divisive budget debate.

In New York, Boehner was asked whether he might consider a short-term debt measure. He did not directly respond.

Democrats admit freely that the must-pass debt limit legislation is going to have to have to be accompanied with cuts to spending, and Vice President Joe Biden on Tuesday is hosting a second meeting of a group of lawmakers on deficit reduction. The group is supposed to come up with bipartisan recommendations on deficit curbs to add to the debt limit measure.

Geithner has told lawmakers that while the government will officially reach the official debt ceiling in mid-May he can take advantage of bookkeeping maneuvers to stave off a first-ever default until Aug. 2.

Sen. Chuck Schumer, a New York Democrat with strong ties to Wall Street, told reporters Monday that it would be a mistake to wait that long to approve the legislation since the markets could easily be roiled when the legislative process takes inevitable twists and turns. Schumer says it would a mistake for Boehner to cut it too close to the Aug. 2 deadline.

“A default would be even more catastrophic than a shutdown. The consequences are much more far-reaching and disastrous for the economy,” he said.

Boehner negotiated for weeks with the White House earlier this on legislation passed last month funding agency budgets through the Sept. 30 of the budget year. But that agreement was reached on the cusp of a partial government shutdown — a luxury lawmakers probably won’t have in the case of the debt-limit measure.

“If America were to default, even for 24 hours, that would have an unprecedented and a catastrophic impact on global financial markets and on American markets,” said Roger Altman, a former top Treasury Department official under President Bill Clinton. “You either default or you don’t. There’s no saying, ‘I’m sorry. I didn’t mean it.’ And that makes it totally different … from a government shutdown.”

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Andrew Taylor reported from Washington.

Copyright © 2011 The Associated Press

7 Responses to "Boehner: Trillions in cuts needed to reduce deficit"

  1. Sandune  May 10, 2011 at 11:30 am

    Speaker Boehner knows damn well the entire Republican Party is sitting on a disaster. In many of the key states where the Tea Party brought in new members of Congress without the voters realizing they would be losing their safety nets and their freedoms for their Gay citizens and their women of breeding age. The amount of money it takes to destroy these freedoms is simply thrown away if the GOP loses the elections.

    I know how the collective minds operate when the pressure from the religious right is pushed on the government. The citizens must support the laws found in the bible because they are told from the crib to the grave that they need to develop a Christian government. This attitude has destroyed many nations across the globe and has brought about wars pitting citizens against each other.

    The development of this all encompassing power in the government will take possession of our health issues and what we inhale, inject, ingest will all be a part of the new American Culture. If this universal health plan is necessary then we have to accept the government intrusion in how we eat, sleep, what we weigh and even how we think. Where and with whom we sleep is right up there at the top of the list of prohibitions.

    This debt threat comes from a government who has taken us from a economy factor into a debt which will be held over our heads by D.C. and we will cave into their fixes. Neither party knows how to get jobs back. Neither party had to face anything other than their reelections with the people picking up the tab for their waste and abuse.

    Many here scoff at my warnings about an abortion ban but how many of you realize the cost of the war on drugs for all of us? Our borders are simply pass points for drugs coming into the USA and money being sent south.

    How much government do we really need? Some controls over corruption is not even mentioned in our debates. Are we as weak and stupid as Boehner claims? Have we turned over our individual freedoms to a group of hypocrites who want to control our personal lives?

    What about our involvement in the Middle East? Do we believe that Bush and Cheney are right and unless we use torture on our prisoners, we will all go up in molten glass at any minute?

    How can a group of Christians even consider torture for our enemies? Do they believe that the American people really want this to be acceptable under Jesus Christ? This mindset is straight out of the Crusades. It is based on the supernatural and occult threats. But it is part of our election issues.

    Why is there no rational explanation for this assault on our gays and women? Do we turn away from these people just to appease the religious right? I cannot do this!

    How can any group of politicians accept the premise that Trump and Gingrich could lead this nation out of any problem? Maybe the Republicans know something that I don’t know. Have we Americans traded our independence for a world of chains, hell and damnation?

    How can we stop this assault? Do we have to approve of a redistribution of wealth just to balance a budget grown by a level of society so vile, it doesn’t even have a name. Will it close what is left of our manufacturing jobs? Will it remove our investments made to care for us in our retirement years?

    Redistributing the wealth will do nothing to stop poverty or instill a desire to educate ourselves and children. My God, read what happened in Russia and France after their revolutions. Hundreds of thousands of people from both nations migrated to America. Look at the Irish immigrants and the hatred for their people in America. We are facing the same crap from the South and entire states like Arizona want these Mexicans put in prison for working to support their own children.

    Apparently the religious right took a chance at passing the ban on abortions and gay marriages through their new level of GOP agenda items. It broke my heart when so many were elected in the last go around.

    Are we facing the dreaded redistribution of wealth just to shut the holy bastards out of office. When it is all over and done with, will there be a plan to get back to allowing our American corporations to be able to rehire their people? Will there be any energy left to correct the tax codes? the trade agreements? and take on the academics of our next generation to be trained to make, market and sell American products?

    Or do we send money to Gingrich, Trump and the other litmus-approved members of the GOP? Do we finally have to accept that America is for white Christian straight men?

    How President Obama managed to locate and kill OBL is something I refuse to even contemplate. In my world, it needed to be done and should have been done instead of our heading for Iraq.

    If we cave into the Republican leadership, how long will it take them to bring back the mandatory service of our young men and women? But more important, who will we declare war against? America will first have to declare that we are a Protestant nation and Martin Luther will be thrown into the pit again. Science will be outsourced to any nation who guarantees results in keeping our citizens healthy.

    But for the good news, Bristol Palin has been signed to do her own reality show on television.

  2. bogofree  May 10, 2011 at 11:39 am

    They were hired to cut so let the cutting begin. Happening in cities and towns and states.

  3. Danny Adams  May 10, 2011 at 6:18 pm

    Does Boehner realize that trillions of dollars in cuts would require substantially require cutting the military budget as well? I’m not sure he’s capable of that–or else he’s planning to eliminate everything else the government does.

  4. Siannan  May 11, 2011 at 10:13 am

    They will never cut the military budget. They are interested in cutting what they view as social programs only: medicaid, medicare and social security and if they have their way, you’ll keep paying social security but they won’t ever pay it out again because they’ll be using it for something else.

    • Danny Adams  May 11, 2011 at 5:37 pm

      Heck, they already use a lot of Social Security money for other things. That’s the real reason it’s in so much trouble.

  5. dvl666  May 12, 2011 at 5:02 pm

    “Tax hikes” off the table. Well for starters why not pay for the 2 GOP wars and Medicare part D? It will take a combination of taxes and cuts to get us out of the hole. Start by having a REAL ‘flat tax” on Social Security with all income taxed. That basically solves the so-called Social Security problem.
    Next Medicare should have some means testing. Seniors pay about $100 a month and have much of their medical care covered. As one paying $1,750 a month that’s absurd. When in AZ this winter it seemed that every other 65+ I played golf with had had a hip replacement, knee replacement, shoulder work and on and on all covered by Medicare with little out of their pockets,
    The Dems are willing to cur spending the GOP should ‘man up’ with some minor tax hikes that only impact the top 2 % of Americans. The remaining 98% of us would not have any aspect of our life changed. It wasn’t the bottom 98 that created the economic mess that we’re in. Typical GOP…compromise means their way or no way.
    We comntinually cut ‘the future'” to placate the past. What a legacy. it seems that the loudest protest over any increase comes from those with the greatest ability to pay.

  6. woody188  May 12, 2011 at 7:56 pm

    I agree with dvl666. I feel like Medicare should cover life threatening disease and injury, not someone trying to become the Six Million Dollar Man (elective surgery) or impotence via Viagra (non-life threatening ailment) on the backs of the working class.

    At least Boehner is finally acknowledging the real figures needed to reduce the government deficit, though this does not address the trade deficit. I’m afraid they are coming after Social Security, Medicare/Medicaid, and government and private pensions. After that they’ll start confiscating precious metals.

    No, military spending won’t be addressed. The United States is a fascist military empire. Sacrifice must be made at home to expand the empire.

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