House speaker calls for spending cuts equal to rise in debt limit

House Speaker John Boehner, R-Ohio, reasserted the House GOP's negotiating position on the pending vote to increase the debt limit in a high profile speech on Monday night before Wall Street heavyweights nervous about how the politics of the vote could shake an already weak economic recovery.

In a speech at the Economic Club of New York, rare for members of Congress, Boehner tried to soothe a growing restiveness on the right in his own party about the ongoing negotiations with Democrats, while also trying to reassure Wall Street that Republicans were serious about confronting the country's deficit problems responsibly. It is a tightrope he will have to walk many times over in the run up to the 2012 elections.

The speaker also sought to regain lost messaging ground over the GOP's proposal to revamp the Medicare system after other Republican leaders, including Majority Leader Eric Cantor, R-Va., Budget Committee Chairman Paul Ryan, R-Wis., and Ways and Means Chairman Dave Camp, R-Mich., raised doubts last week that their Medicare reform proposal would be part of the GOP's demands.

With the exception of tax increases, everything is on the table, including Medicare, Boehner said: "It's possible to make changes in a way that will ensure future beneficiaries will have access to the same kinds of options as members of Congress currently have," he said. "The budget put forth by our Budget Committee chairman, Paul Ryan of Wisconsin, accomplishes this."

Boehner's comments come as his rank-and-file has taken some heat from their constituents over the GOP's plan to convert Medicare into a voucher system for those 55 and under to purchase health care from private insurers. It would not affect current retirees' benefits. While both sides agree that rising health care costs must be addressed, Democrats oppose any plan to alter Medicare as a guaranteed-benefit system. The Medicare debate is likely to be a cornerstone of the Democrats' argument against the GOP in 2012.

"If Speaker Boehner was serious about working with Democrats and reducing the deficit responsibly, then he should not double down on Republican plans to end Medicare as we know it, continue tax cuts for millionaires, and risk our jobs and economic growth by cutting critical investments for the future," said Nadeam Elshami, a spokesman for Minority Leader Nancy Pelosi, D-Calif.

The speaker also outlined the House position on the debt limit, calling for spending cuts equal to the amount by which Congress will have to raise the debt, which will reach the $14.3 trillion current statutory limit by early August at the latest, according to the Treasury Department. "Without significant spending cuts and reforms to reduce our debt, there will be no debt-limit increase," he said.

The tough talk is likely -- at least in the short-term -- to reassure Republicans, particularly the 87 members of the freshman class, who have questioned their leadership's commitment to extracting deep cuts in exchange for their votes on the debt limit. Additionally, Boehner said Republicans remain committed to reining in the Environmental Protection Agency's ability to regulate carbon emissions and passage of three long-delayed trade pacts with Colombia, Panama, and South Korea.

Democrats on Monday suggested Boehner would be irresponsible if he did not rule out the possibility that Congress would not raise the debt limit. "Speaker Boehner must provide unwavering reassurance that no matter what happens, he will not allow the U.S. to default on its obligations," Sen. Charles Schumer, D-N.Y., told reporters.

While Boehner conceded that allowing the United States to default would be "irresponsible," he did not rule it out entirely because "it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process."

It is unusual for a member of Congress to be invited to address the Economic Club of New York, but it was a signal of how closely Wall Street is clocking the fiscal debate in Washington, particularly after the credit rating company Standard & Poor's warned last month that they could downgrade the U.S.'s credit rating if the government fails to come up with a plan to address mounting deficits.