In Reversal, House GOP Agrees to Lift Debt Limit

Washington – Backing down from their hard-line stance, House Republicans said Friday that they would agree to lift the federal government’s statutory borrowing limit for three months, with a requirement that both chambers of Congress pass a budget in that time to clear the way for negotiations on long-term deficit reduction.

The new proposal, which came out of closed-door party negotiations at a retreat in Williamsburg, Va., seemed to significantly reduce the threat of a default by the federal government in coming weeks. The White House press secretary, Jay Carney, said he was encouraged by the offer; Senate Democrats, while bristling at the demand for a budget, were also reassured and viewed it as a de-escalation of the debt fight.

The change in tack represented a retreat for House Republicans, who were increasingly isolated in their refusal to lift the debt ceiling. Speaker John A. Boehner of Ohio had previously said he would raise it only if it were paired with immediate spending cuts of equivalent value. The new strategy is designed to start a more orderly negotiation with President Obama and Senate Democrats on ways to shrink the trillion-dollar deficit.

To add muscle to their efforts to bring Senate Democrats to the table, House Republicans will include a provision in the debt ceiling legislation that says lawmakers will not be paid if they do not pass a budget blueprint, though questions have been raised whether that provision is constitutional.

That “no budget, no pay” provision offered Republicans a face-saving way out of a corner they had painted themselves into — and an effort to shift blame for any default onto the Senate if it balks. The House Republicans’ campaign arm quickly moved from taunting Democrats about raising the government’s borrowing limit to demanding that they sacrifice their paychecks if they fail to pass a budget.

“The Democratic-controlled Senate has failed to pass a budget for four years. That is a shameful run that needs to end, this year,” Mr. Boehner said in a statement from Williamsburg. “We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem.”

House Democrats met the deal with scorn, indicating they would inflict maximum political pain by making Republicans either break a campaign promise to carry it to passage or defy their leaders. But other Democrats were more sanguine. The president had said he would not sign a short-term debt ceiling increase, but a senior administration official said that as long as there were no surprises, the White House was likely to accept the House’s offer. Most important, the official said, Republicans had broken from the “Boehner rule” imposed in 2011: any debt ceiling increase was to include a dollar-for-dollar spending reduction.

The decision represents a victory — at least for now — for Mr. Obama, who has said for months that he will not negotiate budget cuts under the threat of a debt default. By punting that threat into the spring, budget negotiations instead will center on two earlier points of leverage: March 1, when $1 trillion in across-the-board military and domestic cuts are set to begin, and March 27, when a stopgap law financing the government will expire.

Reordering the sequences of those hurdles was central to the delicate Republican deliberations that resulted in the new plan. In the days leading to the Williamsburg retreat, Representative Paul D. Ryan of Wisconsin, the House Budget Committee chairman and former vice-presidential nominee, had been meeting with the leader and three past chairmen of the conservative House Republican Study Committee to discuss a way through the debt ceiling morass.

Those conversations led into Thursday morning, when Mr. Boehner and Representative Eric Cantor of Virginia, the No. 2 House Republican, opened the retreat by going through the timeline for the coming budget fights, according to aides who were there.

They turned the floor over to Representative Dave Camp of Michigan, the House Ways and Means chairman, who delivered a blow-by-blow description of the economic disaster that could be wrought by a government default. Mr. Camp also talked through the notion held by some Republicans that the Treasury Department could manage a debt ceiling breach by channeling the daily in-flow of tax dollars to the most pressing needs, paying government creditors, sending out Social Security checks and financing the military. His message was that it would not work, the aides said.

Then Mr. Ryan stood to talk over the options he had developed with the House conservative leaders. They could do a longer-term debt ceiling extension with specific demands, like converting Medicare into a voucherlike program. Or they could lower expectations, reorder the budget hurdles with a three-month punt, and add the “no budget, no pay” provision.

Persuading Republicans who adamantly oppose raising the debt ceiling took some time, and the ensuing discussion stretched on and on, breaking at noon for lunch on Thursday, resuming at 2:30, until 4 p.m., then concluding Friday.

Representative Kevin McCarthy of California, the House majority whip, met with freshmen early Friday to make sure they were on board. Mr. Boehner and Mr. Cantor joined Mr. Ryan for one last meeting with conservative leaders — Representatives Steve Scalise of Louisiana, Jim Jordan of Ohio, Jeb Hensarling of Texas and Tom Price of Georgia — to make sure they were on board. Then the top four leaders sealed the agreement midmorning.

Mr. Obama will unveil his own 10-year budget plan in February, laying out his tax and spending plans for his second term. But Senate Democrats, for the past four years, have refused to move a budget blueprint to the Senate floor, in violation of the Budget Act of 1974, which laid out new rules for controlling deficits.

For the past two years, House Republicans have approved sweeping budget plans that would fundamentally remake Medicare and Medicaid, sharply reduce domestic spending, increase military spending and order a wholesale rewriting of the federal tax code. But without Senate negotiating partners, those plans, written by Mr. Ryan, have been more political statement than legislative program.

“This is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions for our families and children,” Mr. Cantor said. “It’s time to come together and get to work.”