Bloomberg News

Carney Says Boehner Debt Proposal Isn’t ‘Fair Compromise’

July 27, 2011

(Updates with Carney comments beginning in third paragraph.)

July 27 (Bloomberg) -- President Barack Obama’s spokesman said a plan being pushed by House Speaker John Boehner doesn’t amount to a “fair compromise” that can pass both chambers of Congress.

Press secretary Jay Carney reiterated administration calls for Republican leaders in the House to bend in an effort to reach an agreement with Democrats in the Senate that will raise the federal debt limit before Aug. 2, when the Treasury Department says the U.S. won’t be able to pay all of its obligations.

“The impact of that will be felt without question,” Carney said at a briefing. “It is a crisis situation.”

While saying he remains confident that Congress will act in time to avert a default, Carney said the Treasury Department will make assessments on the government’s payment priorities should the debt ceiling be reached. He called the Aug. 2 deadline “hard and fast.”

The administration continues to object to the two-stage rise in the debt limit under Boehner’s plan, Carney said. Obama is still willing to accept a short-term debt ceiling extension of “a couple of days” to let lawmakers finish work on legislation, he said.

Shorter Extension

An extension of the government’s borrowing authority until the start of early next year under the Boehner proposal “only adds to the great uncertainty that is already having an impact on markets and the greater economy,” Carney said.

Having another set of debt negotiations in six months as both parties are gearing up for the 2012 elections is a “terrible idea,” he said.

“It gets a lot harder to do hard things in an election year,” Carney said.

Republicans have demanded that any increase in the $14.3 trillion debt limit be matched by cuts in the deficit. Obama is insisting on a debt-limit increase large enough to last through the 2012 elections.

Boehner today pushed House Republicans to line up in support as Senate Majority Leader Harry Reid said his competing proposal to avert a potential U.S. default offer the only “true compromise.”

The Congressional Budget Office said both measures fall short of their savings goals, prompting leaders to rework their proposals.

The CBO said Reid’s plan would cut $2.2 trillion over 10 years, shy of its $2.7 trillion target. CBO said Boehner’s plan would save $850 billion rather than its advertised $3 trillion.

Carney rejected statements by some Republicans that Obama has taken a back seat in the negotiations and failed to provide a detailed proposal of his own.

“We have been intensely engaged” in negotiations with Congress, Carney said.

--With assistance from Roger Runningen in Washington. Editors: Joe Sobczyk, Justin Blum

To contact the reporters on this story: Margaret Talev in Washington at; Kate Andersen Brower in Washington at

To contact the editor responsible for this story: Mark Silva at

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