GOP leader: House to vote on debt limit increase

WASHINGTON (AP) — House Republican leaders

Friday offered President Barack Obama a three-month reprieve to a

looming, market-rattling

debt crisis, backing off demands that any immediate extension of

the government's borrowing authority be accompanied by stiff

spending cuts.

The retreat came with a caveat aimed at prodding Senate Democrats to pass a budget after almost four years of failing to do

so: a threat to cut off the pay of lawmakers in either House or Senate if their chamber fails to pass a budget this year.

House Republicans have passed budgets for two consecutive years.

The idea got a frosty reception from House Democrats but a more measured response from the White House and Democratic Senate

Majority Leader Harry Reid of Nevada.

Republicans hadn't settled on full details, but the measure would give the government about three more months of borrowing

authority beyond a deadline expected to hit as early as mid-February, No. 2 House Republican Eric Cantor of Virginia said

Friday.

The legislation wouldn't require immediate spending cuts as earlier promised by GOP leaders like Speaker John Boehner of Ohio.

Instead, it's aimed at forcing the Democratic-controlled Senate to join the House in debating the federal budget.

"We are going to pursue strategies that will

obligate the Senate to finally join the House in confronting the

government's

spending problem," Boehner told GOP lawmakers at a retreat in

Williamsburg, Va. "The principle is simple: 'no budget, no pay.'"

But the move ran into opposition from House

Democrats, including leader Nancy Pelosi of California, who called it a

gimmick

because it would set up another potential confrontation in just a

few months. Votes from Democrats may be needed to help pass

the measure if GOP conservatives opposed to any increase in the

debt limit withhold their support.

"This proposal does not relieve the uncertainty faced by small businesses, the markets and the middle class," said Pelosi

spokesman Drew Hammill. "This is a gimmick unworthy of the challenges we face and the national debate we should be having.

The message from the American people is clear: no games, no default."

But Senate Democrats and the White House were more cautious and sounded encouraged that Republicans seemed to be beating a

tactical retreat.

"We are encouraged that there are signs that

congressional Republicans may back off their insistence on holding our

economy

hostage to extract drastic cuts in Medicare, education and

programs middle-class families depend on," said White House Press

Secretary Jay Carney in a statement. "Congress must pay its bills

and pass a clean debt-limit increase without further delay."

"It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage," said Reid spokesman

Adam Jentleson. "If the House can pass a clean debt-ceiling increase to avoid default and allow the United States to meet

its existing obligations, we will be happy to consider it."

But in Washington-speak, a "clean" debt

limit increase means a stand-alone measure without additional items —

like the "no

budget, no pay" idea — attached. Jentleson said Reid and his

fellow Senate Democrats have yet to decide how they'll respond

to the measure.

The "no budget, no pay" idea is backed by No

Labels, a group started about two years ago by both Democrats and

Republicans

in hopes of easing the partisanship and gridlock that has engulfed

Washington. Sponsors in Congress include Rep. Jim Cooper,

D-Tenn., and Sen. Dean Heller, R-Nev.

The Democratic-controlled Senate passed a

similar idea in 2011 when unanimously adopting a measure to deny pay to

members

of Congress and the president if the government shuts down for

lack of an agency funding bill. But top lawmakers like Judiciary

Committee Chairman Patrick Leahy, D-Vt., have argued that the idea

violates a provision of the Constitution that says Congress

can't change its pay until an election has passed.

At the same time, while Democrats like

Pelosi and allies like Rep. Chris Van Hollen of Maryland protest the

idea of a short-term

debt increase in the government's $16.4 trillion debt cap, they

orchestrated comparable short-term debt relief when they controlled

Congress in 2009.

GOP leaders, meanwhile, have been grappling with how to gain leverage in their battles with Obama over the budget. Boehner

successfully won about $2 trillion in spending cuts as a condition of increasing the government's borrowing cap in 2011.

Obama, however, was dealt a stronger hand by his re-election in November and successfully pressed through a 10-year, $600

billion increase on upper-bracket tax payers earlier this month.

Other choke points remain, including sharp,

across-the-board spending cuts that would start to strike the Pentagon

and domestic

programs alike on March 1 and the possibility of a partial

government shutdown with the expiration of a temporary budget measure

on March 27.

Failing to meet those deadlines would have

far less serious consequences than defaulting on U.S. obligations like

payments

to bondholders, Social Security recipients and myriad other

commitments when the government confronts a cash crisis and can

no longer borrow to make payments. That could cause a meltdown in

financial markets and would inflame voters already disgusted

with Congress.

Under Congress' arcane budget procedures, a congressional budget resolution is a nonbinding measure that tries to set parameters

for future legislation setting agency budgets and curbing federal benefit programs like Medicare.

Boehner has previously invoked a promise

that any increase in the government's borrowing cap would be matched,

dollar for

dollar, by spending cuts or "reforms" that could include curbs on

the long-term growth in retirement programs such as Medicare.

Friday's announcement did not repeat that specific promise.

"Before there is any long-term debt limit

increase, a budget should be passed that cuts spending," Boehner said.

"The Democratic-controlled

Senate has failed to pass a budget for four years. That is a

shameful run that needs to end, this year."

The measure picked up support from key GOP conservatives, including the current and former chairmen of the Republican Study

Committee, a powerful group inside the House GOP.

"In order to allow time for the Senate to

act, next week's bill will extend the debt limit for three months," the

Study Committee

said Friday in a statement. "This is a necessary first step as we

work to halt the decline of America and puts the focus where

it belongs: on the Senate who has failed to do their jobs to pass a

budget for more than three years." The statement was issued

by RSC Chairman Steve Scalise, R-La., and former chairmen, Jim

Jordan, R-Ohio, Tom Price, R-Ga., and Jeb Hensarling, R-Texas.

Obama's budget is due early next month but is expected to be released several weeks later.