House GOP shifts away from spending cuts in debt ceiling plan

House Republicans plan to shift away from specific spending cuts in legislation to raise the debt ceiling, focusing instead on reforms that carry more indirect budget savings.

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Speaker John Boehner (R-Ohio) told rank-and-file members in a closed-door meeting Friday that there would not be “dollar-for-dollar” cuts in the debt package, insisting that the legislation would still meet his requirement of “cuts and reforms” equal or greater to the amount of increased borrowing authority.

"Boehner eschewed that specifically. He said he never said dollar for dollar," Rep. Tom Cole (R-Okla.) said after the meeting.

Party leaders are hoping to have a vote by next week on a debt-ceiling bill, but Boehner told reporters that they had not yet settled on a time. The measure would likely suspend the debt ceiling through the 2014 midterm elections, lawmakers said.

In the meeting, Rep. Justin Amash (R-Mich.) confronted the Speaker over the issue of “dollar-for-dollar” spending cuts, citing a newspaper article from a press conference earlier this year in which Boehner used those words, according to a person in the room. 

The exchange was described as an attempt at a “gotcha moment” by Amash, a frequent critic of the leadership.

Boehner pushed back, saying that the standard for debt limit increases that he first set in 2011 had “always been cuts and reforms.”

The distinction is significant because the laundry list of proposals that Republicans are likely to attach to the debt limit — a delay of ObamaCare, instructions for revenue-neutral tax reform and construction of the Keystone pipeline — would not immediately cut federal spending.

Amash declined to comment on the exchange. 

"I don't speak about conference meetings," he told The Hill.

Rep. James Lankford (R-Okla.) said that Republicans were forced to cast a wider net after the 2011 debt-ceiling deal, the Budget Control Act, focused so heavily on the spending side.

“When you start dealing with discretionary spending, there’s only so much blood in the turnip,” Lankford told reporters. “At some point, we’ve got to turn attention to say, we have to have greater economic activity. We have to pay attention to long-term solutions.”

Republicans will instead focus on the economic growth that they say their proposals will generate, the consequence of which would be higher tax revenue and lower long-term deficits.

“You can bring the deficit down by growing the economy,” Rep. Greg Walden (R-Ore.) said. “You can cost your costs so far, but eventually you have to grow your business.”

A big unresolved question and source of debate within the party is whether to include entitlement reform in the debt package. While changes to Medicare and Medicaid could yield significant budget savings, they are politically contentious.

Walden, who, as chairman of the National Republican Congressional Committee is charged with holding the House GOP majority in 2014, argued strongly against including entitlement reform.

“I don’t think that’s ripe yet,” Walden said. “For big issues like that, you really have to have a partnership that’s willing to sit down and see if we can come to something positive for the country.”

“Those things are so volatile, and politically can be so volatile that you really need to be very thoughtful about how you proceed,” he added. When Republicans or Democrats propose reforms in partisan bills, he said, “one party burns the other.”

The House GOP budget chief, Rep. Paul Ryan (Wis.), said the package should include instructions for entitlement reform. 

“We think that’s going to be a big part of debt limit: mandatory savings, tax reform, entitlement reform,” he told reporters. “There are no savings from tax reform. That’s revenue neutral. You get savings from entitlement reform.”

“It’s basically going to be like a budget,” he added, “where we’re going to have instructions, and we’re going to have a lot of entitlement reform in there.”

Lawmakers and aides said the leadership would incorporate ideas from the meeting into the final package.

“Members were asking why this in on the list and not that,” one congressman said. “It was a listening session. This list is not finalized yet.”

House Ways and Means Committee Chairman Dave Camp (R-Mich.) said the tax reform instructions would be broad and similar to those the House used when it tried to extend all the Bush-era tax rates in August 2012. 

That bill would implement timelines for passing a tax reform that cuts the top and individual income tax rates to 25 percent, eliminates the Alternative Minimum Tax and caps revenue at 18 percent to 19 percent of gross domestic product.

Such a reform would not likely lower budget deficits unless dynamic scoring that took into consideration economic growth was used. 

Other proposals, such as bills to reduce federal regulation, would come from legislation the House has already passed.

“I think what you’re going to see are bills that have achieved a high level of support in the House already, so it’s not going to be things that nobody has ever heard of before,” Walden said. “But certainly it will be legislation we feel strongly about that moves the country in the direction we feel it should move.”

"All these things are bills and ideas that we've been sending over to the Senate for months now that they've refused to act on," said Rep. Steve Scalise (R-La.), the head of the Republican Study Committee. "They're all things that get us back to balance and also things that allow our economy to get back on track."

— Bernie Becker and Peter Schroeder contributed.

Updated at 11:45 a.m.