WILLIAMSBURG, Virginia (Reuters) - Republicans in the House of Representatives may press for only a short term extension of U.S. borrowing authority to keep up pressure for significant spending cuts, House Budget Committee Chairman Paul Ryan said on Thursday.
Ryan, breaking a long public silence since his failed vice presidential bid in the November election, said he believes the Obama administration can and should prioritize payments to avoid a debt default in the event that an increase in the federal debt limit is delayed.
Discussing his party’s budget strategy with reporters at a retreat for newly sworn-in House Republicans, Ryan stopped well short of threatening to push the country into default if the party’s spending cut demands are not met.
But he said Republicans were considering the best approach to use their leverage over looming fiscal deadlines in February and March to reduce deficits.
“We believe that it would be wrong if we walk out of this spring with no achievement on debt reduction whatsoever because that will hurt the country, that will hurt the economy,” Ryan said.
Among options under consideration are a short-term increase in the debt limit, Ryan said without specifying a time frame.
“We’re discussing the possible virtue of a short-term debt limit extension, so that we have a better chance of getting the Senate and White House involved in discussions in March.”
The first of the fiscal deadlines, the exhaustion of federal borrowing capacity, will happen sometime between mid-February and mid-March. The second deadline, the delayed launch of automatic spending cuts, will occur on March 1. And a third deadline comes on March 27, as Congress must enact new funding for government agencies and programs.
Asked if he was willing to “shoot the hostage” and allow the United States go into default over spending cut demands, Ryan said he was “not willing to use any metaphors like that at all.”
Reporting By David Lawder, Rachelle Younglai and Kim Dixon; Editing by Doina Chiacu