GOP pushes for balanced-budget amendment

Amid the uncertainty and bickering over how to raise the debt limit, congressional Republicans are pushing ahead with balanced-budget proposals that could further complicate — or serve as a key bargaining chip to — a final deal.

House GOP leaders have scheduled a vote next week on a bill that calls for a balanced-budget amendment to the Constitution. Senate Republicans, who last month proposed a similar measure, also hope for a floor vote on their version next week.

While Republicans overwhelming back the measures — which would require the support of two-thirds of each chamber of Congress — the proposals face stiff Democratic opposition.

But Republican leaders have suggested a balanced-budget amendment could be part of a compromise with Democrats and President Obama to raise the nation’s $14.3 trillion debt ceiling, saying it would be counterproductive to do so without also taking steps to rein in spending.

“The balanced-budget amendment does just that,” said House Majority Leader Eric Cantor, Virginia Republican. “It accomplishes what we want, which is to change the system and finally begins to get the fiscal house in order.”

Republicans say a balanced-budget amendment is a necessary component of an overall strategy to curb government spending and reduce the nation’s ballooning debt and deficit.

“The amendment that we vote on next week, frankly, it’s just common sense,” said House Speaker John A. Boehner, Ohio Republican. “It says the government can only spend what it takes in, and places real limits on the ability of politicians to increase taxes or to increase spending.”

Senate Minority Leader Mitch McConnell, Kentucky Republican, called the proposal “the single most effective way” to “get our house fiscal in order.”

“If the president and Democrats in Congress won’t agree to cut back, let’s force them to,” Mr. McConnell said on the Senate floor Thursday. “Let’s pass a constitutional amendment that actually requires Congress to live within its means.”

Both Republican versions would require Congress to balance the federal budget each year, cap spending at 18 percent of the gross domestic product and require a two-thirds vote of the House and Senate to increase taxes.

If a joint measure passed Congress, it then would require ratification of three-fourths of the states before it could be added to the Constitution.

But Democratic leaders have vowed to fight the GOP proposals, saying they would lead to cuts in popular entitlement programs such as Medicare, Medicaid and Social Security.

“By enshrining Republican policy priorities in the Constitution — and by making it historically difficult to raise revenue or raise the debt ceiling in order to pay our bills — the Republican amendment would impose severe hardship on millions of Americans,” said House Minority Whip Steny H. Hoyer, Maryland Democrat.

“It is not a solution to our nation’s pressing fiscal challenges.”

Meanwhile Thursday, Treasury Secretary Timothy F. Geithner met with Senate Democratic leaders at the Capitol, and reiterated his warning that failing to raise the debt limit by Aug. 2 would result in the government defaulting on some payments, which he says could trigger another economic crisis.

“We’ve looked at all available options, and we have no way to give Congress more time to solve this problem,” he told reporters after the meeting. “We’re running out of time.”

Federal Reserve Chairman Ben S. Bernanke, while testifying on Capitol Hill before the Senate banking committee, also warned that failing to raise the debt ceiling soon would cause a “self-inflicted wound” that could include higher interests rates and a slowdown in job creation.

“Loss of investor confidence could potentially raise interest rates quite significantly,” Mr. Bernanke said.

Talks between Mr. Obama and congressional leaders on how best to raise the debt ceiling continued Thursday for a fifth straight day at the White House.

Senate Majority Leader Harry Reid, Nevada Democrat, on two separate occasions earlier in the day, accused Mr. Cantor of obstructing the negotiations, saying that “he shouldn’t even be at the table.”

“It’s time for Leader Cantor to make some concessions. He’s the only one at the table who hasn’t,” Mr. Reid told reporters. “More than anything else, he is holding up an agreement at this point.”

Mr. Hoyer earlier this week also rebuked Mr. Cantor for saying Republicans were making a concession simply by agreeing to join the negotiations.

Rumors have swirled that Mr. Cantor has undercut Mr. Boehner during the closed-door debt talks — a portrayal the majority leader has dismissed.

“The speaker and I have consistently been on the same page,” Mr. Cantor said.

Mr. Boehner concurred, saying “any suggestion that the role that Eric has played in these meetings has been anything less than helpful is just wrong.”

Congressional leaders and the White House reported no breakthroughs after Thursday’s debt-limit talks and won’t meet Friday.

But Mr. Obama told the congressional leaders he expected them to find agreement on a path to a final deal during the next 24 to 36 hours, said a senior GOP aide familiar with the negotiations. If the group was unable to do so, the president suggested another meeting would be called this weekend. Mr. Obama said he and his staff would be “on call” during this time.