House Speaker John Boehner set out a broad template for the Republican Party's approach to the economy in a speech to the Economic Club of New York on Monday night, suggesting smaller government, steep budget cuts and small business know-how are the key to adding jobs in the United States.
"Our economy does best when government respects our people enough to give them the freedom to do what they do best," said Boehner. "I believe our mission as legislators is to liberate our economy from the things that impede growth; to provide clear policies, so that innovators and entrepreneurs have the green light to move forward and create jobs, without having to worry about second-guessing from Washington."
While Boehner addressed the crowd of 750 financial and political professionals, the Federal government was ticking ever closer to the $14.29 trillion debt ceiling. At the end of the market day, Uncle Sam had less than $23 billion in available credit -- equivalent to just $16 left on a $10,000 credit card.
The Speaker gave a nod to the need to increase the debt limit, but not without steep cuts in government spending.
"It's true that allowing America to default would be irresponsible," said Boehner. "But it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process. To increase the debt limit without simultaneously addressing the drivers of our debt -- in defiance of the will of our people -- would be monumentally arrogant and massively irresponsible."
Economists and policy makers in Washington say on May 16 regular government spending will max out the Congressionally-mandated debt limit.
Insiders tell ABC News that date will likely come and go without a vote, forcing the Treasury to enact several "extraordinary measures" to keep the Federal government operating.
Treasury Secretary Geithner said that the measures -- which include temporarily borrowing funds from government worker pension and retirement funds -- will likely give the administration and Congressional Republicans until early August to iron out a deal.
The hesitance to vote on a "clean bill" which would expand the credit limit without simultaneously reducing government spending was the result of the influence of the influence of Tea Party freshmen and their vocal supporters. It is a reality Boehner acknowledged in the speech.
"The revolt that we have seen around our country by ordinary citizens over the past few years is like nothing we've seen in our lifetime," said Boehner. "And it's happening in part because the arrogant habits of Washington are having real economic consequences. The debt limit debate presents our nation's leaders with the opportunity to reverse these habits and prove that we're starting to get the message. It's a chance to change course and admit that reactionary, short-term Washington solutions aren't always best."
Geithner has said on numerous occasions not expanding $14.29 trillion borrowing limit would cause "catastrophic economic impact[s]" which would affect every American.
"We will not succeed in balancing the federal budget and overcoming the challenges of our debt until we commit ourselves to government policies that will let our economy achieve long-term growth," said Speaker Boehner. "Our economy won't grow as long as we continue to trip it up with short-term gimmicks from Washington."