From Msnbc.com's Carrie Dann and NBC's Ali Weinberg
Even as it exposes fault lines in the new Republican caucus, a looming clash over the federal government’s borrowing power could serve as a major bargaining chip for Republicans hoping to force President Barack Obama to green light major spending cuts.
Some conservative Republicans have urged their GOP colleagues to resist raising the ceiling -- which currently clocks in at $14.3 trillion -- under any circumstances. Rep. Michele Bachmann of Minnesota is collecting signatures on her PAC's website "to force our elected officials to stop spending cold turkey," and Sen. Jim DeMint of South Carolina has advocated for a "big showdown" with Democrats by blocking the raise.
But House Budget Chairman Rep. Paul Ryan says that tactic isn't viable. "Just refusing to vote for it, I don't think that's really a strategy," he said, noting that a failure to raise the ceiling could result in the nation defaulting on its debts to investors.
"Will the debt ceiling be raised? Does it have to be raised? Yes," he said at an event sponsored by economics21 and the Manhattan Institute at the National Press Club Thursday.
But Ryan suggested that Republicans can tweak some specifics of the move - how many years the increase covers, for example. And, more importantly, they can tack on requirements for deep spending cuts as a condition of passage. "I want to make sure we get substantial spending cuts and controls in exchange for raising the debt ceiling," he said.
In a letter to Congress Thursday, Treasury Secretary Tim Geithner called on lawmakers to act swiftly to raise the debt limit, calling a default "unthinkable" and warning that it could cost "millions of American jobs."
Congress may be able to hammer out a deal on a debt ceiling increase, but Republicans have made clear that compromise with Democrats is still likely to be the exception, not the rule, in the 112th Congress.
House Republicans say they are determined to vote on repealing Obama’s health care reform law, despite CBO estimates that say the bill would actually reduce the deficit by $145 billion by the end of this decade.
Ryan said that Democrats omitted several high-cost aspects of the bill when submitting it to the CBO for scoring, like the cost of implementation and the "doc fix" provision that sustains high levels of Medicare payments.
"It's not CBO that did the book cooking, it's Democrats that wrote the bill that they gave to CBO that cooked the books," Ryan said.
House Majority Leader Eric Cantor today called the CBO figure "full of budget gimmickry" and defended the merits of holding a vote to repeal the bill, saying it showed that Democratic-controlled Senate “wants to continue to be the impediment for results."
In addition to a continued battle over the health care law, Ryan said that the Budget Committee would hold "lots of hearings" over federal assistance to fiscally troubled states, adding that a bailout would not be on the table.
"Should taxpayers in frugal states have to bail out taxpayers in profligate states?" Ryan asked, using Indiana and California as his respective examples, potentially foreshadowing a coastal-versus-heartland battle to come.
And the hearings on fiscal issues won't stop there, Ryan added.
Referring to the Fed foe set to become chairman of the House subcommittee on monetary policy, Ryan quipped: "I'm sure Ron Paul has a few plans of his own."