Republicans tee up round 2 of debt-ceiling fight

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Sen. Graham: Obama 'playing small ball'

GOP lawmaker's message to president on debt negotiations

Republicans gave no ground Sunday to President Obama's demand for near-unilateral power to increase the debt ceiling, with one influential senator predicting the party will once again use the debt-ceiling vote to extract trillions in spending cuts.

The senator, Tennessee's Bob Corker, broke with some in his party Sunday by urging Republicans to drop their opposition to tax hikes on the wealthiest 2 percent. Corker, though, explained that he only thinks Republicans should cave to Obama on tax hikes because then they can focus on winning entitlement cuts as part of the debt-ceiling negotiations.

"Republicans know that they have the debt ceiling that's coming up right around the corner, and the leverage is going to shift, as soon as we get beyond this issue," Corker said on "Fox News Sunday."

"The leverage is going to shift to our side, where hopefully we'll do the same thing we did last time."

Corker said that if the president wants to raise the debt limit by $2 trillion, Republicans should press for $2 trillion in spending cuts.

That prospect is sure to infuriate the White House. After the bruising debt-ceiling fight from 2011, Obama recently warned that he will not "play that game" again. "We've got to break that habit before it starts," the president said.

The president argues that fights over the debt ceiling merely shake global confidence in the country's ability to pay its bills, and as part of talks over the looming fiscal crisis has called for a de facto permanent increase in the debt limit. It amounted to his second major demand as part of the fiscal talks, with the first being to raise tax rates on those making more than $250,000. It remains unclear whether both sides can strike a deal before rates are set to rise on everyone Jan. 1, roughly three weeks from now.

Corker, while indicating Sunday that he's leaning toward tax hikes, said the debt ceiling will not be "given up" unless Obama agrees to "real" entitlement cuts.

"Without that, there's no way in my opinion the debt ceiling is going to be given up. So then you go into January and February, with the negotiation about spending reductions which is where we want to go," Corker said.

Significantly, he said any debt-ceiling deal should have "no process" attached to it. That means he would want any entitlement cuts to be locked in as part of that deal -- and not delegated to another committee, as was done as part of the last debt-ceiling deal. The failure of that committee to then produce an agreement contributed to the current fiscal crisis, where sweeping and indiscriminate spending cuts are set to take effect on Jan. 2.

Other Republicans were similarly resistant to Obama's debt-ceiling demand.

Rep. Jeb Hensarling, R-Texas, said it was tantamount to the president saying "we no longer need even a speed bump."

"I mean, let's look at Greece. Greece has been very adept at increasing their debt ceiling. And now they have 25 percent unemployment," he said on ABC's "This Week."

While Hensarling continued to express opposition to raising tax rates, on the same show Republican Sen. Tom Coburn appeared to side with Corker.

Coburn said he'd be open to a tax increase, in exchange for "significant entitlement reform."

"We've got to quit playing the game," he said. "You can't continue to lie to the American people.

"Medicare and Social Security and Medicaid, if those aren't fixed, if we're not honest about how to fix them, and the fact that, yes, everybody in this country will have to participate in some discomfort if we're going to get out of this hole. And as long as we continue to lie to the ...  American people that you can solve this problem without adjusting and working on those programs, it is dishonest and beneath anybody in Washington."

Republicans, though, are in for a fight if they try to use the debt-ceiling vote to extract entitlement reform.

Some Democrats continue to suggest that entitlement spending is not the driver of the nation's debt crisis. On "This Week," Michigan Democratic Sen. Debbie Stabenow tried to claim $700 billion in cuts to Medicare as an example of already-enacted entitlement reform -- though Coburn pointed out that money went to cover the costs of the federal health care overhaul.

Other Democrats are simply opposed to the debt ceiling being used as a negotiating tool, considering the chaos that ensued last summer.

On "Fox News Sunday," Sen. Charles Schumer, D-N.Y., said he thinks the debt ceiling will be part of a fiscal agreement this year.

"I believe, frankly, our Republican colleagues have learned that to say the government is not going to pay its debts and hold it up for something else is bad substance and bad politics.  I don't think they'll prevail on that," he said. "If they want to say 'we won't raise the debt ceiling unless you cut Medicare,' make our day."