W House takes dim view of Boehner plan

Reuters/WashingtonThe White House took a dim view yesterday of Republicans’ demand that President Barack Obama accept more than $2tn in spending cuts in exchange for their agreement to raise the $14.3tn US debt limit.House of Representatives Speaker John Boehner, the top Republican in the US Congress, on Monday laid down a tough new yardstick in talks over the US debt, saying spending cuts must exceed any boost to the US borrowing limit.A senior White House official said that Obama agrees debt reduction is an urgent priority and the president has offered a “balanced, fair plan” for $4tn in deficit reduction.Obama believes bipartisan negotiations led by Vice President Joe Biden, which resumed yesterday, can lead to an agreement on further substantial reduction, the official said.“But it is simply irresponsible to declare that you will tank the US economy if you don’t get what you want,” the official said.Treasury Secretary Timothy Geithner has warned of economic catastrophe if the federal government’s borrowing authority is not increased and has told Congress that he will be able to stave off default until Aug. 2 by drawing on other accounts once the debt limit is reached.An increase of $2tn will be needed to cover the country’s borrowing needs through the November 2012 elections, Treasury officials have told lawmakers, but Congress could opt for a smaller increase if more time is needed to hash out a deal.Obama wants to raise taxes on wealthier Americans and shield popular entitlement programmes like the Social Security and Medicare programmes for the elderly.