By Molly K. Hooper - 05/15/12 07:20 PM EDT
Speaker John Boehner (R-Ohio) on Tuesday vowed to only raise the debt ceiling if President Obama and Democrats agree to an greater amount of spending cuts and entitlement reforms.
Boehner also promised that no tax hikes would be a part of the package, and laid out plans for a fast-track process to guarantee tax reform would take place in 2013.
Boehner made the remarks in a politically charged address at the Peterson Institute in Washington on a day where the debate over the nation’s fiscal health dominated D.C.
The speech included several shots at Obama, whom Boehner said lacked the “courage” to lead on fiscal issues.
Democrats and officials in the Obama administration fired back, with Treasury Secretary Timothy Geithner warning that Boehner should not play games with the debt ceiling.
“We hope they do it without the drama and the pain and the damage they caused the country last July,” he said of Congress's role in the upcoming negotiations on raising the debt ceiling.
Treasury has said the ceiling will likely be hit this year, but that the department has the tools to buy time so that a hike to the ceiling could be put off until next year. The Bush tax rates are set to expire at the end of 2012, and automatic spending cuts from last year’s debt-ceiling deal are scheduled to be implemented in January 2013. This has been described by Federal Reserve Chairman Ben Bernanke as a “fiscal cliff” that threatens the economy.
Boehner previously has promised that the House would vote to stop all of the Bush tax rates from expiring at the end of the year. On Tuesday, he said this legislation would also “establish an expedited process by which Congress would enact real tax reform in 2013.”
He said the Ways and Means Committee is busy working out the details of the plan.
"The bottom line is, if we do this right, this will be the last time we ever have to confront the uncertainty of expiring tax rates. We’ll have replaced the broken status quo with a tax code that maintains progressivity, taxes income once and creates a fairer, simpler code," Boehner said.
The Speaker said Washington had no choice but to act, and highlighted his own business background to make the argument.
“Having run a business, I know that failing to plan is planning to fail,” Boehner said. “The real pain comes from doing nothing … ‘austerity’ is what will become necessary if we do nothing now. We’ll wake up one day without a choice in the matter.”
Boehner and Obama held personal talks last year on a grand bargain deficit-cutting plan that unnerved members of both parties. Boehner on Tuesday put the blame on their failure solely on Obama.
“I believe President Obama cares about this country and knows what the right thing to do is. But knowing what’s right and doing what’s right are different things,” Boehner said.
“The difference between knowing what’s right and doing what’s right is courage, and the president, I’m sorry to say, lost his.”
Boehner said the two were on the verge of a deal that would have reduced deficits by trillions last summer by “strengthening entitlement programs and reforming the tax code with permanently lower rates for all.”
But he said Obama lost his nerve because of Senate Democrats, whom Boehner said wanted to push for tax hikes.
“When the president saw his former colleagues in the Senate getting ready to press for tax hikes, he lost his nerve,” Boehner said. “The political temptation was too great. He moved the goalposts, changed his stance, and demanded tax hikes.”
Boehner promised that Republicans in Congress would act on the debt ceiling and expiring Bush-era tax cuts before the election in November.
“Sometime after the election, the federal government will near the statutory debt limit. This end-of-the-year pileup, commonly called the ‘fiscal cliff,’ is a chance for us to bid farewell — permanently — to the era of so-called ‘timely, temporary and targeted’ short-term government intervention,” Boehner said.
“Previous Congresses have encountered lesser precipices with lower stakes, and made a beeline for the closest lame-duck escape hatch. Let me put your mind at ease. This Congress will not follow that path — not if I have anything to do with it,” he continued.
Boehner insisted he’s ready to take up the challenge of dealing with difficult issues, even in the midst of a highly charged election year.
‘If we have leaders with the courage to make tough choices and the vision to pursue a future paved with growth, then we can heal our economy and again be the example for all to follow.
“I’m ready, and I’ve been ready. I’m not angling for higher office. This is the last position in government I will hold. I haven’t come this far to walk away,” Boehner said.
—This story was updated at 4:30 p.m.