GOP Demands Deep Spending Cuts as Debt-Ceiling Fight Looms

Republicans are renewing attempts to use a debt-limit increase to force deeper spending cuts, replicating the 2011 showdown that caused the U.S. to come within days of default and led to a credit-rating downgrade.

As in 2011, many Republicans in Congress see the need to raise the $16.4 trillion limit on public debt in early 2013 as leverage to force President Barack Obama to cut entitlement programs such as Medicare and Medicaid. House Republicans view the U.S. budget deficit, which topped $1 trillion in each of the past four years, as a crisis requiring immediate action.

“There has to be a reality out there that says we are in serious trouble,” said Representative Tim Walberg, a Michigan Republican. “We can’t just keep raising it because it’s been traditional to do it.”

The prospect of another debt-ceiling showdown is complicating the stalled talks to prevent more than $600 billion of spending cuts and tax increases from taking effect in January. Republicans, who say they didn’t suffer politically from the 2011 fight, are reprising their tactics. The administration wants to include a debt limit increase in a fiscal cliff deal and prevent Congress from wielding default as a weapon in the future.

Talks on averting the fiscal cliff are at a standstill. Democrats continue to demand higher tax rates for top earners, while Republicans want to cut spending on entitlements and other programs.



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