House Conservatives Will Insist on Cuts to Entitlements, Mandatory Spending

Prominent House conservatives are insisting that any increase in the debt limit be tied to cuts or changes in entitlement programs and mandatory spending, rather than just a tax overhaul, potentially complicating GOP leadership efforts to work out an agreement with Democrats to avoid a default.

The chorus of lawmakers who are targeting mandatory spending, the largest and fastest-growing portion of the budget, has grown since a GOP conference to discuss the debt limit last week. Although House Speaker John A. Boehner, R-Ohio, has continued to say that any increase in the debt limit be matched by spending cuts or budget reforms, party leaders have been focusing more intently on a tax overhaul as a major demand for raising the debt limit. Some conservatives say that is only half the debate, however.

“There’s talk of tax reform, there’s talk of a lot of other policies, but you have to address mandatory spending,” said Steve Scalise, R-La., chairman of the Republican Study Committee. “Mandatory spending has to be a core of any package on the debt ceiling because that ultimately is where our real long-term debt is.”

Scalise and other conservatives spoke to reporters on Wednesday at an event setting out expansive policy goals that would encompass a broad range of tax and spending issues. They also could complicate efforts by House GOP leaders to round up a majority of the caucus if conservative members won’t go along with a deal negotiated by leaders that doesn’t meet the conservatives’ goals.

Todd Rokita, R-Ind., said the moment is important for a more fundamental rewrite of federal priorities.

“Reforming the tax code would give us more growth, that would give us more revenue that could be used for paying down the debt,” he said. “It could be used for some other things, but that’s on the revenue side. But until we understand, the country understands, that we have a spending problem, we will never solve the problem. And that’s why, in my view, any debt ceiling increase has to be tied to spending cuts, reforms.”

President Barack Obama and Democratic congressional leaders have rejected any trade-off for a debt limit increase, saying other issues should be considered separately.

But some Democratic lawmakers say they could envision a debt limit increase and deficit reduction legislation moving as a package, allowing the administration to deny any direct link between the two.

In recent weeks, GOP leaders such as Ways and Means Chairman Dave Camp of Michigan and Budget Chairman Paul D. Ryan of Wisconsin have pitched the idea of tying a tax overhaul to a debt ceiling increase, according to lawmakers who have discussed the subject with them. One of their arguments is that simplifying the tax code and lowering rates would spur economic growth, generating additional tax revenue that could be used to reduce the growth of the debt. Another argument is that although Obama is sure to oppose major changes to federal health care programs such as Medicare and Medicaid, Democrats may be more amenable to a tax overhaul.

And although tax simplification is popular among conservatives, some lawmakers said they won’t vote to raise the debt limit in exchange for a promise to do it at some later date.

Raúl R. Labrador, R-Idaho, said one proposal presented by House leaders “is that we are going to have a plan for tax reform in exchange for a debt ceiling increase. That’s nonsensical in many ways, and a slap in the face in many ways as well. We have talked about getting to balance in 10 years. You’re not going to get into balance in 10 years by just doing tax reform.”

During a meeting of the conference to solicit views on raising the debt limit last week, House Republicans said one of the most popular ideas was to insist on balancing the budget in 10 years in return for raising the debt limit. The fiscal 2014 budget resolution adopted by the House in March proposes eliminating the deficit within a decade.

Conservatives on Wednesday said that when the conference met for a retreat in Williamsburg, Va., in January, leadership promised to seek a 10-year balance in return for raising the debt ceiling.

“The agreement was that any debt ceiling increase would correspond with the reforms that are necessary to meet the requirements in our budget, to get us to balance in 10 years,” Scalise said. If Obama were to agree to something less than a balanced budget in debt ceiling talks, he said, “the amount of time that the debt ceiling is increased should be corresponding to the size or seriousness of the reforms that ultimately are agreed to that could get us to that 10-year balance. The size of that package would dictate how much the debt ceiling could increase.”

That package, they said, would have to include the mandatory spending in some of the largest government programs.

“The agreement was that in the final analysis the debt ceiling would be tied to things that would get us to that 10-year path to balance,” said Mick Mulvaney, R-S.C. “That was it. That might be Obamacare. It might be Medicare. It might be block granting Medicaid to states. It could be a lot of different things. That was the agreement.”

A GOP leadership aide said Boehner had agreed with rank-and-file members to cuts or “reforms” that put the nation on a path to balance the budget in 10 years in return for a debt limit increase.

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