More than 150 economists have signed a statement supporting House Speaker John Boehner’s (R-Ohio) call for spending cuts at least equal to the amount by which Congress raises the country’s debt ceiling this year, a figure that could total trillions of dollars.
The statement, which was released by Boehner’s office Wednesday morning ahead of a 10 a.m. meeting between Obama and the House Republican conference, comes one day after the House overwhelmingly rejected a measure to raise the country’s debt limit without any additional spending cuts. The vote underscored Republicans’ message that significant cuts need to be included in any deficit-reduction deal.
“An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms to address our government’s spending addiction will harm private-sector job creation in America,” the statement reads. “It is critical that any debt limit legislation enacted by Congress include spending cuts and reforms that are greater than the accompanying increase in debt authority being granted to the president. ... An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms would harm private-sector job growth and represent a tremendous setback in the effort to deal with our national debt.”
Among those signing the statement are economists from Stanford and Carnegie Mellon Universities; former Reagan secretary of state George Shultz; Columbia University economist and Nobel Prize winner Robert Mundell; and former Congressional Budget Office directors Douglas Holtz-Eakin and June O’Neill.
Wednesday’s meeting will be the first between Obama and the entire House Republican conference since November's mid-term elections. House Democrats are set to meet separately with Obama at the White House on Thursday.
The Treasury Department has set an Aug. 2 deadline by which Congress must vote to raise the $14.3 trillion debt ceiling. If not, the country will face default. Vice President Biden, who has held four meetings so far with bipartisan congressional leaders to work toward a comprehensive deficit-reduction deal, said last week that he believed the negotiators would be able to exceed $1 trillion in cuts. Republican leaders have indicated that any cuts will likely need to exceed $2 trillion.
While the parties have found common ground on spending cuts in the deficit-reduction talks, the matters of revenue and Medicare remain the biggest stumbling blocks. Democrats insist that tax increases must be on the table, an idea Republicans reject. Republicans maintain that an overhaul of expensive entitlement programs such as Medicare must be included; Democrats strongly oppose that idea.
The letter signed by the economists on Wednesday, however, refers only to spending cuts and makes no mention of overhauling entitlement programs.
White House press secretary Jay Carney told reporters Tuesday that Obama will hear out House Republicans’ concerns at Wednesday’s meeting but will continue to emphasize the “calamitous” consequences of default.
In addition to the White House meeting, new developments in the debt-ceiling debate could come at 10 a.m. Wednesday when Treasury Secretary Tim Geithner testifies before the House Financial Services Committee at a hearing on “The State of the International Financial System.”