GOP using debt-ceiling debate as leverage for spending cuts

Last week, we noted that Republican leaders hope to use the coming showdown over the debt ceiling to push through major spending cuts. Now the GOP is beginning to put its strategy into action.

Here's how it works: In March, the federal government is scheduled to eclipse the amount it can legally borrow. The Obama administration has suggested failing to raise the ceiling before then would lead to a catastrophic U.S. default on its debt, badly weakening the dollar and roiling world financial markets (though many observers say that's not necessarily the case). But raising the ceiling will require GOP support. And many rank-and-file Republican lawmakers, rebuffed on a pledge to control spending, are deeply reluctant to provide it.

So, Republican leaders have signaled that they'll ultimately agree to raise the debt ceiling -- but they'll insist on major spending cuts as their price.

And this weekend, Republican leaders made that strategy clearer than ever. Speaking at a GOP House retreat, Speaker John Boehner defined the debt problem as Democrats' fault. "President Obama and Congressional Democrats have been on a job-destroying spending spree that has left us with nothing but historic unemployment and the most debt in U.S. history," Boehner told his colleagues. "If they want us to help pay their bills, they are going to have to start cutting up their credit cards."

House Majority Leader Eric Cantor was even more explicit about the GOP's willingness to bargain. "These are leverage moments for Republicans, and an opportunity for us to enact real spending cuts," he said at the same event.

What's the upshot of all this political positioning expected to be? It means that in all likelihood, the debt ceiling will be raised, just as it has been many times before. So financial markets and creditors of the federal government can probably relax on that front. But by increasing Republicans' "leverage," it makes it only more probable that we'll soon see big spending cuts.

In its "Pledge to America," released last September, the GOP said it would cut $100 billion in spending -- which, according to one study, would lead to an unprecedented one-year drop in spending. Lately, Republicans have backed off that number but say they still want far-reaching cuts.

Such cuts could modestly reduce the federal deficit, but many economists fear they might also hamper the still-fragile recovery -- especially if they affect programs that help low-income Americans, like unemployment benefits. But whatever you think of them, the coming showdown over the debt ceiling is making them more likely to come to pass.

(Photo of Boehner: AP/Susan Walsh)