A new John Boehner tax deal proposes lifting the the debt ceiling once again. The United States is expected to reach the $16.4 trillion debt cap in early February of 2013 at which point the Federal government is not allowed to borrow any more money. The relative closeness of the debt ceiling has led it to become part of the Fiscal Cliff negotiations.
The Federal debt ceiling is a law that is theoretically intended to keep Federal spending from getting out of control. In practice, Congress tends to use the debt ceiling as a bargaining chip, giving leverage to Republicans who wish to see large scale spending cuts. Only Congress has the authority to lift the debt ceiling. Obama previously attempted to request the ability for the Presidential office to control the debt ceiling, but House Speaker John Boehner (R-OH) told Reuters this was a non-starter:
“Congress is never going to give up our ability to control the purse. And the fact is, is that the debt limit ought to be used to bring fiscal sanity to Washington.”
As previously reported by The Inquisitr, House Speaker John Boehner (R-OH) met with President Obama on Friday to attempt to broker a final deal for avoiding the Fiscal Cliff. Boehner reportedly extended the offer of increasing the top marginal income tax rate to 39.6 percent for those making more than $1 million per year. Previously, Democrats had identified the $1 million mark as being “the rich” but after President Obama won re-election they shifted their goal to $250,000.
This tax increase on the rich would bring in about $45 billion in extra revenue per year, or $450 billion over 10 year. Unfortunately, this revenue increase hardly makes a dent in the $1.33 trillion budget deficit.
According to the Associated Press, in return, Republicans would agree to lift the debt ceiling for another year, but they also desire that Democrats allow for $100 billion in spending cuts, or $1 trillion over 10 years. The spending cuts would primarily come from government benefit programs like Medicare, which would defer the cost of domestic programs and the military budget. Even Social Security is on the cutting board, with Republicans asking for a modification to inflation adjustments for benefits, an idea that Democrats had previously supported and was recommended by Obama’s deficit super committee.
Late this evening, Boehner’s office issued a statement clarifying the House Speaker’s position on the debt ceiling:
“Our position has not changed. Any debt limit increase would require cuts and reforms of a greater amount.”
Do you think this new John Boehner tax deal has a chance of finding a middle ground with Obama and the Democrats?