House Speaker John Boehner (R-Ohio) sees the debt ceiling as an "action-forcing event" where he will insist on cuts greater than the increase, setting up a legislative fight similar to the one that paralyzed Congress last summer.
Boehner called the statutory debt limit the "only avenue" to solve "our structural fiscal imbalance," at the Peter G. Peterson Fiscal Summit Tuesday. A Boehner aide told the Washington Post that tax increases are still off the table.
"We shouldn’t dread the debt limit," Boehner said. "We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction."
Speaking at the conference, Treasury Secretary Timothy Geithner warned Boehner on the debt limit. "This commitment to meet the obligations of the nation, this commitment to protect the creditworthiness of the country, is a fundamental commitment that you can never call into question or violate," he said, according to The Hill. He said he hopes Congress will raise the debt limit "without the drama and the pain and the damage they caused the country last July."
Historically, raising the debt limit had not been a mechanism to force major policy changes and had passed easily with partisan grumblings about the level of debt. However, congressional Republicans in 2010 insisted on adding major cuts to an increase in the debt limit, raising the specter of default. The deal finally reached provided a $2.4 trillion increase in the debt limit with $2.4 trillion in cuts over 10 years.
A variety of spending cuts and tax increases take effect shortly after the debt ceiling is expected to be reached, potentially setting up a battle worse than last summer. Geithner said in February said that he expects that the debt ceiling will be hit sometime between Sept. 30, 2012 and the end of the year. The Bush-era tax cuts also expire at the end of 2012, and $1.2 trillion in automatic cuts to defense spending and Medicare as part of the debt ceiling deal take effect in 2013.
This post has been updated.