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Sunday, July 10, 2011

House Speaker John Boehner Statement On Smaller Debt Deal

House Speaker John Boehner (R-OH) released the following statement today regarding ongoing debt limit discussions with the White House:

"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."

So, because Democrats insisted on raising taxes, something the GOP stated up front was a non-starter and would never pass the House of Representatives, the deal to reduce the federal deficit by $4 trillion over the next decade now becomes a much smaller deal where negotiators work toward an agreement closer to $2 trillion.

James Pethokoukis provides a quote from an email he received from GOP congressional source:

Their fierce insistence on higher taxes is beyond bizarre. After months of demanding ‘clean’ increase to avert economic calamity (default), WH threatens economic calamity (default) unless they get economic calamity (trillions in tax hikes). No wonder these guys are governing over an economic calamity (9.2% & growth malaise), w/ an economic calamity on the horizon (debt explosion as mapped out in president’s budget). The bipartisan consensus on tax reform (broader base & lower rates) was championed by President’s fiscal commission, and yet now is being rebuked by the President. Lowering top rates that would help make America more competitive was too large a leap for a true class warrior.

The good news here is any debt limit increase will be accompanied by at least the same amount in spending cuts and/or reductions.

The better news is that by the time this issue comes around again, there is a distinct possibility that Americans will have replaced Obama with someone that won't hold our economy hostage over tax increases.