Speaker John Boehner (R-Ohio) has offered to delay any fight over raising the debt-ceiling for a year, according to a report in the Washington Post.
The Post says Boehner made the offer on Friday, the latest step as Republican lawmakers and the White House seek to find a deficit-deal to avoid January’s “fiscal cliff” of tax hikes and automatic spending cuts.
Offering to take the debt-limit off the table could be a significant concession from GOP lawmakers.
President Obama’s initial deficit-reduction offer included a measure that would have allowed him to raise the debt-limited as needed. Congress could have blocked such a move only by a two-thirds resolution.
Republicans, though, rejected Obama’s calls to give him authority to raise the debt ceiling in the fiscal cliff deal, arguing that holding the power to raise the limit gives them greater leverage to force spending cuts or entitlement reforms.
The Treasury will hit its $16.4 trillion borrowing limit by the end of the year and the White House says it wants to avoid another contentious fight over raising the ceiling.
In 2011, a protracted fight over the debt limit ended with only hours left before the government would have run out of money. Even though Congress and Obama reached an agreement, the political wrangling led to the first ever downgrade of the nation’s credit rating.
The president has rallied supporters on Wall Street, who argue that the turmoil over another debt-limit fight could hurt stock markets and lead to uncertainty that could undermine the economy’s recovery.
Boehner had previously withheld a specific offer on the debt limit, and it comes as he has made a significant concession on taxes in an effort to break the weeks-long stalemate. In a phone call with the president Friday night, Boehner offered to consider raising tax rates on people making more than $1 million a year in exchange for “substantial cuts and reforms,” a person familiar with the negotiations told The Hill.
Republicans and the White House had been deadlocked over taxes on the wealthy, with Obama insisting that any deficit deal raise rates on those who make over $250,000 a year. The president rejected the Boehner offer, but talks continued through the weekend. Democrats want to extend the expiring Bush-era tax rates for the middle class, while allowing them to lapse for higher earners.
GOP leaders wanted to extend the rates across-the-board, arguing that higher taxes on any income bracket could harm job growth.
This story was updated at 9:13 p.m.