JUDY WOODRUFF: The confrontation over raising the national debt ceiling consumed Washington for much of 2011. Now the issue has reemerged. It was raised at a White House meeting today, and sparked a new war of words in Congress.
REP. JOHN BOEHNER, R-Ohio: The issue here is the debt, almost $16 trillion worth of debt, a $1.3 trillion budget deficit again this year.
JUDY WOODRUFF: Battle lines were already being drawn today for a new fight over raising the country's borrowing limit. The government will not reach the current debt ceiling until the end of this year, or maybe 2013.
But House Speaker John Boehner went into a White House luncheon with the president vowing to make it a prime topic now.
REP. JOHN BOEHNER: And what I'm trying to do is encourage people on both sides of the aisle, on both sides of the Capitol and at both ends of Pennsylvania Avenue to be honest with the American people and to be honest with ourselves, to begin to tackle this problem in an adult-like fashion.
JUDY WOODRUFF: Boehner announced Tuesday that he will again demand spending cuts only, and no tax hikes, to match any increase in the debt limit. But Congressman James Clyburn and other leading Democrats charged it was a made-up issue to help Republicans score political points.
Clyburn said today, "I hope the president will not get roped in to this foolishness."
Boehner took the same stance in last summer's protracted battle over the debt ceiling. A last-minute deal averted national default.
And White House Press Secretary Jay Carney said the president warned lawmakers today against letting history repeat itself.
JAY CARNEY, White House press secretary: We're not going to recreate the debt ceiling debacle of last August. It is simply not acceptable to hold the American and global economy hostage to one party's political ideology.
JUDY WOODRUFF: Mr. Obama did not mention the debt issue during an event promoting his economic to-do list.
PRESIDENT BARACK OBAMA: We want to sustain momentum. And one of the ways that we can sustain momentum is for Congress to take some actions right now, even though it's election season, even though there's gridlock, even though there's partisanship, take some actions right now that would really make a difference.
JUDY WOODRUFF: But, like Speaker Boehner, Republican presidential candidate Mitt Romney raised the debt issue yesterday. He returned to it today, in St. Petersburg, Fla., with a national debt clock behind him for emphasis.
MITT ROMNEY (R): I find it incomprehensible that a president could come to office and call his predecessor's record irresponsible and unpatriotic, and then do almost nothing to fix it, and instead every year to add more and more and more spending.
JUDY WOODRUFF: Republicans and Democrats alike say they don't expect action on the budget or the debt ceiling until after the election.
To help us understand this latest political maneuvering, we are joined by Todd Zwillich, a reporter for the PRI's "The Takeaway" on WNYC Radio, and Steve Dennis, who covers the White House for Roll Call newspaper.
Gentlemen, it's good to have you both with us.
Todd Zwillich, to you first.
If nothing is likely to be done until after the election, why is the speaker bringing this up now?
TODD ZWILLICH, "The Takeaway," Public Radio International: Well, the speaker spoke to this yesterday at a conference here in Washington which you were at, Judy. We all saw you moderating a discussion there.
Take the speaker at his word. He said, I don't feel like I have any other tools to get Washington serious about spending cuts, other than the debt limit. Why would he say that? Because we've all seen this movie before. We remember how bruising it was last year when Republicans insisted on tying the debt limit to spending cuts, and it became a long, protracted fight, one that the president and the White House says they don't want to repeat.
There's a political angle to this, also, as well, of course. The speaker does his right wing some favors, probably does the conservative base that Mitt Romney is also trying to satisfy some favors by saying, we are dead serious about debt. This is our main charge against the president. It's an economic charge. It's a fiscal responsibility charge and we're here to solve it.
JUDY WOODRUFF: Steve Dennis, what would you -- what light can you shed on why now, though?
STEVEN DENNIS, Roll Call: Well, I think if you look at the context of the election, considering that the debt limit isn't going to need to be raised probably until January or February of next year, this is about focusing the nation's attention on the debt, which is something Republicans would much rather be talking about and Mitt Romney, obviously, wants to be talking about. They want to have the issue focused on debt and deficits. . .
JUDY WOODRUFF: Rather than?
STEVEN DENNIS: The White House this week wanted to be talking about their new jobs packages. You know, they wanted to be talking about letting people refinance their homes. They want to be talking about small business tax cuts, all these things that are sort of passing out goodies, instead of dealing with a big barrel of pain, which is what's headed at the end of the year. We have got expiring tax cuts. We have got huge spending cut and we have got the debt ceiling increase.
Those are sort of three legislative nuclear weapons all about to go off. And everybody is holding one of them hostage.
JUDY WOODRUFF: But the fact that the speaker is talking about it now, Todd, Todd Zwillich, does that mean something can be done about it in the near future?
TODD ZWILLICH: Something can always be done. Congress makes the laws. The president signs the laws. Sure, something can be done. Will it? Not until after the election, and in terms of the debt limit, maybe not until after New Year's.
When you saw Jay Carney there say we're not going to do this again, you say, well, Mr. President, if the debt limit expires, you kind of are. Well, they have a little bit of power over this. Tim Geithner, the treasury secretary, said yesterday essentially that the speaker's threat is largely hollow because we have some tools and if the debt limit expires in late November or December, we can -- we can -- we have some tools within Treasury to extend things out. This may even come after New Year's, and maybe this won't come down to a debt limit showdown.
Now, the speaker says we don't have to wait until the last minute. We can talk about this now. We can be responsible. Yes, Republicans want to have the discussion now. That doesn't mean that the president is going to take the speaker's bait and have a debate all throughout the summer and into fall over how and when to raise the debt limit and tie it with spending cuts. I don't think so.
JUDY WOODRUFF: Well, let's talk just for a second, Steve Dennis, about the substance of this, what the speaker is asking for, only spending cut to match whatever the increase in the debt ceiling.
You talk today, as I did, to some deficit hawks, people who care about the debt and the deficit, and they say to do that is really realistically very difficult. You stay away from defense, you have got to go to programs for the poor, education.
STEVEN DENNIS: Medicare.
JUDY WOODRUFF: Medicare.
STEVEN DENNIS: I mean, these are third rails, and, you know, I think the real problem, the risk here that Republicans have is that, you know, they're having a hard enough time dealing with a sequester, which is $1.2 trillion in spending cuts that kicks in at the end of this year from last year's deal.
JUDY WOODRUFF: If they don't come up with a new plan.
STEVEN DENNIS: Right. So, how are you going to come up with new cuts for another $2 trillion increase? It is going to be very hard for them to do that.
And the risk here is, if you look what happened in Europe, they're forcing all these countries to do all this austerity and those governments are falling. Austerity is pretty unpopular when you go to the people and say, oh, do you want to cut Medicare? It doesn't really work very well politically.
So, the job here for the Democrats and the president is to go out to the folks and say, hey, if you follow John Boehner's prescription, we are going to decimate programs you care about, and take that to the election.
Now, in the meantime, though, there is a real risk -- people are starting to get nervous on Wall Street again.
JUDY WOODRUFF: Just by the very -- the subject being raised.
STEVEN DENNIS: Just the possibility of a year-end fiscal train wreck.
Ben Bernanke's worried about if this -- all these three bombs go off at the same time, that the economy could go back into a recession very quickly. You know, if Wall Street starts thinking maybe they can't come up with a deal, that could be happening right around the elections. And, you know, that's a very volatile environment. We saw in 2008 when Wall Street gets nervous, you know, the politics can change really fast.
JUDY WOODRUFF: Well, Todd Zwillich, you talk to folks on both sides of the aisle. Have the Republicans thought through that part of it? As we noted, Mitt Romney is out on the campaign trail at the very same time raising the debt issue. Coordination there or coincidence?
TODD ZWILLICH: Well, the speaker's speech yesterday was scheduled for a long time. It was clear that Mitt Romney was eager to get off of other issues that capitalized the campaign last week, gay marriage, for instance.
He wasn't eager to talk about that. John Boehner certainly wasn't eager to talk about gay marriage. He would answer that question saying, marriage is between one man and one woman, but I'm here focuses on the economy. You knew where John Boehner was going in terms of where he thinks the messaging should be.
Democrats on the Hill in terms of these fiscal bombs that are about to go off think they have some leverage here. Steve mentioned the sequester, and that's $600 billion of domestic cuts, $600 billion of defense cuts.
JUDY WOODRUFF: The automatic cuts if they can't reach an agreement.
TODD ZWILLICH: Which are going into effect Jan. 1, and everyone, including Republicans, signed on to. Democrats are sitting on the Hill telling me, we're fine with that. Republicans, sure, we can undo those $600 billion in defense cuts if you want to. We can tie it to the debt limit if you want to. Let's talk revenue. Put a dollar of tax increases on the table.
In terms of the election, as the president and Mitt Romney go to the public with these two issues, the Democrats' message is, yes, we have a fiscal problem, but the other side won't even consider a tax increase for the richest among us. You have heard that refrain. I don't need to explain it. Yes, we have a fiscal problem. Let's talk about balance, not just spending cuts that we have already taken from the middle class.
JUDY WOODRUFF: So, Steve Dennis, finally, what do we look for next? I mean do we look for meetings to be scheduled to talk about this?
STEVEN DENNIS: No, I think we're just going to get the same posturing we have gotten over the past year as far as the big picture, as far as the fiscal year-end cliff.
The real question, though -- they did talk also during this hoagie summit -- they did talk about things they can get done in the next few months, things they need to get done on student loans, things they need to get done on the transportation bill. Maybe they will take up one or two of President Obama's to-do list, maybe a small business tax cut.
There are some things that are really small ball that maybe they can get done as long as they don't attach tax increases, and that was the message that Mitch McConnell brought in -- the Senate Republican leader, brought into the meeting.
JUDY WOODRUFF: So, meanwhile, the attention focused on the debt ceiling, but you're saying there was real practical work done as well.
STEVEN DENNIS: It wasn't really a negotiating session. But I think the fact that it was cordial, that they came out saying we may be able to get some things done I think is a positive sign for at least a few things sort of happening under the radar here.
JUDY WOODRUFF: A good note to share.
Steve Dennis, Todd Zwillich, thank you both.
TODD ZWILLICH: Pleasure.
STEVEN DENNIS: Great to be here.