This evening, Speaker John Boehner went before the Economic Club of New York to detail GOP demands in the fight over the debt ceiling. In short, Republicans will only support raising the debt ceiling if it comes with spending cuts that exceed the increase in borrowing power. In Boehner's own words: "Cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions. They should be actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future."
What's more, Boehner firmly rejected tax increases, arguing for a debt-reduction program that focuses entirely on spending cuts: "If we’re serious about balancing the budget and getting our economy back to creating jobs, tax hikes should be off the table."
A few things. First, this is an extraordinarily radical proposal. Since 2001, Congress has raised the debt ceiling eight times, with a median increase of $825 billion. Given the rate at which we're accumulating debt, there's a strong chance that an increase will fall near the median, meaning cuts that rival the stimulus package in size and significance. An $825 billion cut spread out over two years (the usual time between debt-ceiling increases), amounts to either large cuts to Medicaid, Medicare, and Social Security or the virtual elimination of all non-defense discretionary spending. That same cut over five years would slash non-defense discretionary spending by a third, and by nearly 16 percent spread out over 10 years.
Far from bringing economic security, this plan -- which cuts far more than the recently passed House budget -- would cost hundreds of thousands of jobs and deprive millions of needed benefits (including help for poor children, college students, and disabled people), while preserving huge tax cuts for the wealthiest Americans.
Boehner's proposal is an opening bid in negotiations and will never come close to fruition (although it could push Democrats to accept more draconian cuts than they intended). Even still, it's worth describing this plan for what it is: a cruel, sick joke.