By Vicki Needham - 07/17/11 03:39 PM EDT
Sen. Lindsey Graham (R-S.C.) said he'll only vote to raise the debt ceiling if lawmakers back a House plan to cut and cap spending and pass a balanced budget amendment.
Faced with the U.S. going into default or taking up another way to increase the nation's debt limit, Graham said he intends to stick with the House proposal that cuts spending back to 2008 levels and caps the budget at 18 percent of gross domestic product.
"Cut, cap and balance gets us out of debt over a long period of time," he said. "I think that's going to be the Republican position, and to me it's a very sound position."
Yet Senate Minority Whip Jon Kyl (R-Ariz.) said Sunday that Republicans won't be responsible for the U.S. defaulting on its debt. The Senate is proceeding with a separate plan still under construction by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) that would raise the $14.3 trillion debt limit.
"If there's no other way to reach some kind of savings agreement, then at the end of the day Republican leaders have made it clear that we will not be the ones who put the government into default," Kyl said on ABC's "This Week."
Kyl said he thinks there won't be a default when all is said and done.
Still, Graham said he is "very willing to raise the debt limit" but within the realm of passing a balanced budget amendment that is part of the House proposal.
A balanced budget amendment won't give "Congress any excuses" and would force lawmakers to "make some hard decisions," Graham said.
He expressed a willingness to close a so-called tax loophole on ethanol that would "put some money into debt retirement" but said he would "only do that in the context of a serious plan to balance the budget."
Graham's comment run counter to those of White House budget director Jack Lew who said earlier on Sunday that most lawmakers "understand the need to raise the debt ceiling although there will be a "fringe that believes that playing with Armageddon is a good idea but I don't think that's where the majority will be."
"It's not insignificant that all leaders understand that it would be irresponsible to get to Aug. 2 and not extend the ability of the United States to pay its debt," Lew said on CNN's State of the Union.
Lew said he's confident Congress will vote to raise the debt ceiling, although specifics of an agreement were still out of reach on Sunday.
While Graham criticized President Obama for saying a balanced budget amendment isn't needed, Lew lent further support for the White House position, arguing that Congress should do its job of getting the budget under control and said the "president [has] shown willingness to move substantially" to cut spending and the debt as part of the package to raise the debt ceiling.
Despite heightened talks among lawmakers and the administration, "we don't think it's enough, the president has said clearly we should do as much as we can to reduce the deficit and the time to act is now."
Kyl urged the administration to take "job-killing" tax hikes off the table while the economy still struggles to recover.
The House Republican proposal would raise the debt ceiling by $2.4 trillion after Congress passes a balanced-budget amendment to the Constitution.
"This is the real deal to limit spending and get us in balance and it would be an amendment to our Constitution," Graham said. "Without that we're just going to talk to each other and run America into the ground."
A balanced-budget amendment passed the House in 1995 but failed to pass in the Senate.
Lew called the proposal "draconian" because it applies spending limitations that would force cuts in Medicare and Social Security "more deeply than even the House Budget resolution."
Although the Republican Study Committee's "Cut, Cap and Balance" proposal is likely to pass the House next week it won't have enough support in the Senate, meaning lawmakers will need another avenue to raise debt ceiling before Aug. 2, when the U.S. is expected to default on its debt.
Graham said he's urging Democrats to help craft a balanced-budget amendment and said while there's room to negotiate on capping the levels of spending in relation to GDP, he doesn't "think what's subject to being negotiated is the idea of passing a balanced-budget amendment."
Senate Finance ranking member Orrin Hatch (R-Utah) said in the Republicans weekly address on Saturday that all 47 Republicans senators back the balanced-budget amendment proposal he's introduced with Sens. Mike Lee (Utah) and John Cornyn (Texas).
“Unfortunately, last week the White House dismissed a balanced-budget amendment saying it is not good for the economy, and that our debt isn’t a constitutional issue," Hatch said.
That bill would require the president to submit and Congress to pass, a balanced budget every year. The measure, like the House plan, would limit spending to 18 percent of gross domestic product and require supermajorities in the House and Senate to raise taxes.