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GOP fissures may bog budget debate

Boehner struggles to build caucus

House Speaker John Boehner, facing a fight over raising the $16.4 trillion U.S. debt ceiling and funding the federal government in coming weeks, is working first to forge a more manageable Republican caucus.

Boehner is making moves to control his members. The speaker removed four Republicans who opposed him on spending issues from the Budget and Financial Services committees, and a Boehner ally took control of a group of more than 165 members that aligns with the anti-tax Tea Party on fiscal issues.

The stakes are high as House Republicans gather in Williamsburg, Va., for a retreat to plan strategy. Members are demanding spending cuts from President Obama and the Democratic-led Senate in exchange for a debt-ceiling increase. Still, Republicans risk being blamed for a government shutdown – or should the U.S. default on its debt for the first time.

“It is a very difficult conference to manage,” six-term Rep. Tom Cole, a Republican from Oklahoma and an ally of Boehner, said in an interview.

Boehner, from Ohio, leads a reduced majority of 233 members, down from 241 Republicans in the last session of the 435-seat House. Many Republicans are smarting over their inability to prevent tax-rate increases in a Jan. 1 deal to avert automatic tax increases and spending cuts.

Rank-and-file members will do much of the talking during the private getaway, and Boehner will do the listening.

“We’re going to be talking a lot about policy issues, the kinds of initiatives that we’re going to try and come together on,” said Arizona Rep. Trent Franks.

Although the debt limit has been periodically raised since its creation in 1917 –with Congress raising or revising it 79 times, including 49 times under Republican presidents, since 1960 – Republicans are preparing for confrontations with Obama and Senate Democrats over spending. That will start with a debate about raising the debt ceiling next month.

The Treasury Department has said it expects to run out of emergency measures to prevent a breach of the current debt limit between mid-February and early March.

Investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown any alarm.

The last time Congress fought over raising the ceiling, Obama signed an increase on Aug. 2, 2011, the day Treasury warned U.S. borrowing authority would expire. Standard & Poor’s cut the nation’s credit rating. Still, yields on 10-year U.S. Treasury notes declined to 2.56 percent on Aug. 5 and continued to decline. The yield stood at 1.82 percent at 5 p.m. Wednesday.

Another political showdown may emerge in early March, when Congress must decide whether to replace $110 billion in automatic cuts in federal defense and discretionary spending. The reductions had been set to start this month, until Congress delayed them in the Jan. 1 tax deal with Obama.

On March 27, a short-term measure that funds government agencies will lapse, creating a third potential fight.

The House speaker can’t leave decisions about the trio of issues to his caucus, Cole said.

“I would hope that there is some sort of game plan that they have in mind because I really think when you are a leader you have to lead,” Cole said.

Lawmakers also expect Boehner and his chief assistant, Majority Leader Eric Cantor of Virginia and top vote-counter Kevin McCarthy of California, to show they are unified after ending the last lame-duck session at odds.

“As long as Cantor and Boehner are on the same page, I don’t think there should be a problem,” Idaho Rep. Mike Simpson said in an interview.

In an unusual leadership split, Cantor and McCarthy voted against the Jan. 1 bipartisan tax plan. Among the House’s 241 Republicans, 151 opposed the measure. The division was notable, given that the Senate vote adopting the deal was close to unanimous – just five of the chamber’s 47 Republicans opposed it.

“The most important thing for Republican unity is a unified leadership team,” said Cole.

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