*W.House says Republicans trying to hold economy hostage
*Boehner: U.S. facing "window of opportunity" to fix debt
*Tougher Republican stance may complicate Biden talks
By Andy Sullivan and Steve Holland
WASHINGTON, May 10 Battle lines hardened in
Washington on Tuesday as the Obama administration geared up for
an intensive round of talks with lawmakers to allow the United
States to avoid an unprecedented default on its debt.
Ahead of an afternoon meeting of Vice President Joe Biden
and top lawmakers from both parties, the White House said
Republicans should not hold the U.S. economy hostage by tying
an increase in the country's borrowing authority to
trillion-dollar spending cuts.
"To hold one hostage to the other remains extremely
unwise," White House spokesman Jay Carney told reporters aboard
Air Force One as President Barack Obama flew to Texas.
House of Representatives Speaker John Boehner, the top
Republican in Congress, on Monday unveiled a tough new
yardstick that would require spending cuts to exceed any boost
in the country's $14.3 trillion debt limit, which will be
reached on May 16. [ID:nN09267955]
"This is a window of opportunity for us to address the big
challenges that face our country," Boehner said on Tuesday on
NBC's "Today" show.
Boehner's new stance puts hard numbers behind the
Republican position that any debt-limit increase must include
sharp spending cuts to ensure that the country's debt does not
grow to an unmanageable level.
But it is certain to complicate the Biden talks, which
kicked off on a relatively amicable note last week after
Republicans said controversial elements like healthcare and
taxes would be off the table.
The country is borrowing roughly $125 billion each month,
and the Treasury Department has said a debt-limit increase of
$2 trillion will be needed to last through the November 2012
Even though Treasury will hit the current debt limit next
week, congressional aides do not expect a deal until around
July. Treasury has said it can use various techniques to stave
off default until Aug 2. A default on U.S. debt would be
unprecedented and cause turmoil in markets across the globe.
So far, markets have shown no signs of concern. U.S.
10-year Treasuries are currently yielding 3.17 percent -- well
below their average of 6.75 percent over the last 30 years.
Aside from the Biden-led group, which includes six
lawmakers from the House and the Senate, Obama is scheduled to
meet with senators on Wednesday and Thursday.
BOEHNER SETS THE BAR HIGH
In a highly polarized political environment, Boehner's
marker of "trillions" in cuts will be hard to achieve.
Congress took the government to the brink of a shutdown
last month in a separate budget battle that yielded a mere $38
billion in cuts and tested Boehner's authority over the right
wing of his party, which is allied with the fiscally
conservative Tea Party movement.
Though both sides could agree to cuts in some areas, such
as farm subsidies, their areas of disagreement carry a much
higher dollar figure.
A budget plan passed by House Republicans last month would
save $2.2 trillion over 10 years by repealing Obama's signature
healthcare overhaul and scaling back the Medicaid health
program for the poor. Democrats have already rejected these
The Republican plan would save another $720 billion by
scaling back other benefit programs, such as food and housing
aid for the poor -- another nonstarter for Democrats.
The two sides might be able to agree on cuts to domestic
programs, such as law enforcement and education, which have
their funding levels set by Congress each year.
Obama has proposed $770 billion in savings by holding down
the growth of these programs over the next 12 years, while
House Republicans are seeking cuts of $1.8 trillion over 10
But Boehner and other Republicans have ruled out any
revenue increases, which Democrats say will be needed to narrow
stubborn budget deficits that have hovered around 10 percent of
GDP in recent years.
Boehner also appeared to discourage consideration of a plan
that would trigger automatic cuts if Congress does not meet
agreed-upon deficit-reduction targets, an approach that has
drawn some bipartisan support.
(Additional reporting by David Morgan and Jeff Mason; Editing
by Vicki Allen)