Boehner demands trillions in cuts in exchange for debt vote

House Speaker John A. Boehner said Monday that Republicans wanted trillions in budget cuts in exchange for their vote to increase the nation’s borrowing limit and avoid default, adopting a hard line on the party’s position in a speech before major players on Wall Street.

Boehner told the Economic Club of New York that his party wanted specific spending cuts — not future targets that would trigger spending reductions or revenue increases, as President Obama has proposed.

Laying down a marker on the eve of new budget negotiations, the Ohio Republican also said he wanted the amount of the cuts to exceed any increase in the nation’s borrowing limit, a demand that probably would mean new spending reductions of $2 trillion or more — many times higher than the $38 billion in cuts approved last month in the 2011 budget.

“It’s true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process,” Boehner said.

His address before the New York audience came as Obama called lawmakers to the White House for several days of talks this week over raising the nation’s $14.3-trillion debt limit.

Boehner has been increasingly caught in a political squeeze. On one side, the Obama administration and its allies have demanded that GOP officials reassure markets that they won’t gamble with U.S. debt obligations. On the other, “tea party” activists charged Monday that GOP leaders were selling out the nation’s conservatives.

Last week, GOP leaders backed away from the party’s controversial proposal to overhaul and eventually privatize Medicare.

“I wish our tearful House speaker would just show some compassion for American taxpayers and our children,” said the Rev. William Temple, a tea party activist from Georgia, speaking at the National Press Club. “It’s a cowardly act of treason against coming generations, and we may be able to give Mr. Boehner something to really cry about in 2012.”

Boehner notably did not fully embrace the party’s Medicare plan, beyond saying there must be “honest conversations” about the program.

The Treasury Department has estimated that without raising the debt ceiling, the country would default on its obligations by Aug. 2. Top Democrats warn against prolonging the debate past mid-July for fear of roiling jittery financial markets and risking the nation’s economic recovery.

Many Republicans won their seats in Congress after campaigning against the debt limit increase, and Temple said the tea party groups would be grading lawmakers on the debt ceiling vote alone.

“If you vote to raise the debt ceiling, you get a ‘0’ for the year from the tea party,” he said. “If you don’t vote to raise the debt ceiling, you get a ‘100’ and you’re a hero.”

Bob Vander Plaats, an influential Christian leader in Iowa, called default concerns “a myth,” and said the debt limit vote provided “the perfect opportunity to substantially reduce the size and scope of government.”

At the same time, rank-and-file lawmakers are pushing Republican leaders to use the debt ceiling vote as leverage.

Rep. Michele Bachmann (R-Minn.) said Monday that any debt ceiling vote “must include a vote to fully defund” Obama’s healthcare law. In the Senate, Sen. Patrick J. Toomey (R-Pa.) chastised Democrats for raising what he called the “false specter of default.”

The debate offers a measure of the difficulty of deficit politics as the nation borrows at a rate of $125 billion a month. At that rate, it would take a $2-trillion increase in the debt limit to get beyond the 2012 election.

Democrats warned Boehner not to prolong the debate. “This is playing with fire,” said Sen. Charles E. Schumer (D-N.Y.). “Speaker Boehner needs to have that adult moment right now.”

As investors worldwide keenly watch the unfolding debate, GOP leaders are conducting outreach to financial leaders. Another key Republican, House Majority Leader Eric Cantor of Virginia, planned to visit Wall Street on Tuesday.

Boehner reiterated his position that no new tax increases be on the table, a stance that will be difficult to maintain as Democrats press to close tax loopholes.

Officials from both parties have floated a two-track strategy that would provide immediate spending cuts while setting triggers that would require further budget reforms in future years if deficit reduction goals are not met. But Boehner appeared to dismiss the trigger approach Monday.

This week will see another round of negotiations, with Vice President Joe Biden convening congressional leaders on Tuesday and Obama summoning all senators to the White House for talks Wednesday and Thursday.

Democrats are also preparing their own 2012 budget proposal for release in coming days. It is expected to address various long-term tax, spending and entitlement issues.

lisa.mascaro@latimes.com

kathleen.hennessey@latimes.com