Obama threatens to veto 'cut, cap and balance'

July 18, 2011 - 11:44 AM

WASHINGTON (AP) — The Obama administration says President Barack Obama would veto the "cut, cap and balance" plan proposed by tea party-backed House Republicans if it lands on his desk.

In a statement, the Office of Management and Budget says that setting arbitrary spending levels and a balanced budget amendment are not necessary in order to achieve financial stability.

The so-called "cut, cap and balance" plan is favored by some Republican freshmen in the House. It would allow the government to borrow an additional $2.4 trillion, but only after big and immediate spending cuts and adoption by Congress of a constitutional amendment requiring a balanced federal budget.

The plan is sure to stall in the Senate, where majority Democrats say it would lead to decimating budget cuts.