By Erik Wasson - 01/18/13 07:58 PM EST
Leaders of the most conservative bloc in the House Republican Conference are backing leadership’s plan to increase the debt ceiling for three months, even though the increase has no concrete spending cuts attached to it.
In exchange, conservatives have won assurances that the 2014 House budget will contain deeper spending cuts than the 2013 budget.
They also have been assured that discretionary cuts accomplished through sequestration in fiscal 2013 will not be replaced by either mandatory spending cuts or tax increases. These cuts hit defense and non-defense spending, so the most likely outcome will be for the GOP to push defense cuts into the domestic spending category.
“The first step to halting Washington’s spending addiction is passing a budget that cuts spending. The House has passed such a budget, and will again. For the past four years, the United States Senate has refused to pass a budget at all, failing the American people in the process. That practice has to end this year,” the statement reads.
The House will vote next week on a three-month increase of the nation’s $16.4 trillion borrowing authority. The bill will condition any further increase on the Senate passing a budget resolution for the first time in four years and require that members will have their pay withheld if a budget is not passed.
“As part of agreement, the House will work to put the country on the path to a balanced budget in 10 years. House leadership also agreed to stand by the $974 billion discretionary number that is part of the sequestration process,” the statement says.
A source said that the $974 billion refers to the discretionary cap in 2013 after automatic sequestration is allowed to occur.
Last year, House Budget Committee Chairman Paul Ryan’s (R-Wis.) budget contained $5 trillion in spending cuts but did not balance until nearly 2040. A more conservative RSC budget would have balanced within 10 years.
“Chairman Ryan looks forward to working with his colleagues to draft a responsible budget by the April 15 deadline. He hopes today’s agreement helps spur action by his Senate counterparts to do the same. With the right reforms put in place, Chairman Ryan’s goal is to advance a budget that balances within a decade," Ryan spokesman William Allison said.
The 2013 Ryan budget contained massive changes to entitlements, including partially privatizing Medicare, making food stamps and Medicaid block grants, and capping Medicaid. it also contained tax reform aimed at lowering individual and corporate tax rates so that the top rate drops to 25 percent. The current top individual rate is now 39.6 percent after the "fiscal cliff" deal.
To balance the budget within 10 years, Ryan may have to consider cuts to benefits for seniors over 55 years old or drastic actions such as closing government departments.
The RSC's balanced budget plan in 2011, nicknamed "cut, cap and balance," passed the House by a vote of 234 to 190 during the height of the last debt-ceiling crisis. That plan achieved its savings without touching retirement benefits for those over 55 years of age but imposed an 18.5 percent cap on federal spending, down from 25 percent, necessitating massive cuts to other aspects of the budget.
— Published at 1:53 p.m. and last updated at 2:58 p.m.