By Erik Wasson and Molly K. Hooper - 05/16/12 12:40 AM EDT
In an election-year speech designed to give Republicans the high ground in policymaking and the 2012 campaign, Speaker John Boehner (R-Ohio) on Tuesday said President Obama lacked the “courage” to deal with the nation’s fiscal problems.
“I believe President Obama cares about this country and knows what the right thing to do is,” Boehner said in an address at the Peter G. Peterson Foundation that included pointed criticism of Obama. “But knowing what’s right and doing what’s right are different things.”
Boehner vowed that the House would show leadership this fall by acting to prevent the Bush tax rates from expiring and by laying out plans for a fast-track process to guarantee tax reform would take place in 2013.
The vote would allow Republicans to campaign as the party that keeps tax rates low, while the fast-track process appeared designed to help both parties reach at least a temporary legislative solution on taxes that could allow the next Congress to take action.
“This will give Congress time to work on broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits and special carve-outs,” Boehner said.
He also promised the House would only raise the federal government’s $16.4 trillion debt ceiling if Democrats agree to further spending cuts and entitlement reforms.
“When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt-limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance,” Boehner said.
Boehner’s attack on Obama reignited the rhetoric of last summer’s debt crisis and triggered instant criticism from the administration and Senate Democrats, who suggested Boehner was playing with fire by returning to the debt-ceiling debate. While that fight left both parties with lower approval ratings, Democrats think they can make political hay out of Boehner’s threats on the nation’s debt level.
“It’s pretty clear to me that the Tea Party direction of the Republican Party is driving them over a cliff,” said Senate Majority Leader Harry Reid (D-Nev.), who warned Boehner risked building a GOP that no one but congressional Republicans would like.
Sen. Charles Schumer (D-N.Y.) warned that Boehner was threatening the economy with another downturn by creating uncertainty as to whether the United States will pay its debts.
“The last thing the country needs is a rerun of last summer’s debacle that nearly brought down our economy,” said Schumer, who leads messaging for Senate Democrats.
Obama is scheduled on Wednesday to meet with congressional leaders from both parties at the White House.
Before Boehner made his address, Treasury Secretary Tim Geithner warned the Speaker against playing 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.
Geithner and Boehner have had a tense relationship in the past. Boehner called on Geithner to resign before the 2010 elections. His office said Tuesday that there is “no update” on this demand.
“A prairie fire of debt is sweeping across Iowa and our nation, and every day we fail to act that fire gets closer to the homes and children we love,” Romney said at a campaign event in Iowa. “Rather than put out the spending fire, he has fed the fire.”
Senate Minority Leader Mitch McConnell (R-Ky.) offered measured support for Boehner when pressed by reporters.
“I think the request of the president to ask us to raise the debt ceiling ought to generate significant response to deal with the problem of deficit and debt,” he said.
Boehner’s remarks could help him with his restive rank and file.
Many GOP freshmen are frustrated their plans to shrink the government have not advanced further. House conservatives are grumbling that last August’s debt-ceiling showdown with the White House did not yield big enough spending cuts.
In a nod to those members, Boehner said no gimmicks would be accepted in the next round of negotiations on the debt limit. He said the administration had offered budgetary tricks that had given Washington a pass on real spending cuts.
He also said a series of stopgap measures to keep the government operating were possible, though not ideal.
Despite those pledges, the conservative Club for Growth criticized Boehner on Twitter. “Boehner’s dollar-for-dollar ask on the debt limit is a sham,” it said. “Debt limit is $2.1 trillion higher and what spending cuts have we gotten?”
Members of both parties have been bracing for a flurry of work in the lame-duck session of Congress, given a series of pressing fiscal issues.
Treasury has said the debt ceiling will have to be raised again early next year, just after the Bush tax rates are set to expire and automatic spending cuts from last year’s debt-ceiling deal are ready to be implemented. A payroll tax cut is also set to expire.
Federal Reserve Chairman Ben Bernanke has described the series of issues as a “fiscal cliff” that threatens the economy.
Neither party has an incentive to move before the fall elections, since both sides want to campaign on issues of taxes and spending.
Reid reiterated the longstanding Democratic position that tax increases on wealthier households and businesses must be part of any deficit bargain, and that social programs should be protected.
The outcome in November will likely determine what happens next, but that is raising anxiety about the overstuffed lame-duck and leading to the prospect of some of the decisions being punted further into 2013.
“I would hope that we would have a better process,” Sen. Susan Collins (R-Maine) said Tuesday, “rather than going to the brink of default.”
— Russell Berman contributed.
Updated at 11:00 p.m.