More than 150 economists back House of Representatives Speaker John Boehner's call to match any increase in the debt limit with spending cuts of equal size, according to a letter released by the Republican leader's office on Wednesday.
The letter will give Boehner an important talking point as he and his fellow House Republicans meet with President Barack Obama at 10 a.m. to discuss the debt limit and other fiscal issues.
"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 letter said.
Signatories include Nobel laureate Robert Mundell of Columbia University and economists from schools like New York University and Georgetown University, as well as conservative think tanks like the American Enterprise Institute.
The Treasury Department has warned that the country could face a default that could push it back into recession and roil markets across the globe if it does not raise the $14.3 trillion debt limit by Aug 2. Treasury has been tapping federal employee pensions and other funds to pay the nation's bills since it reached the current debt limit on May 16.
Republicans say they will not back any increase that does not include steep spending cuts and other limits to ensure that debt stays at a manageable level.
The Republican-controlled House on Tuesday defeated a bill that called for a debt-limit increase without conditions.
In talks led by Vice President Joe Biden, Republicans and Democrats have identified hundreds of billions of dollars in possible spending cuts, and both sides say they could ultimately find more than a trillion dollars in deficit savings.
But they must resolve a dispute over the biggest-ticket items. Democrats say they will not consider cuts to popular health benefits until Republicans consider tax increases.
(Reporting by Andy Sullivan; Editing by Peter Cooney)
Copyright 2011 Thomson Reuters. Click for Restrictions.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more