President Obama vowed Monday that he would not negotiate with Republicans over the federal debt ceiling, warning that Social Security checks would be delayed and the nation could enter a new recession if Republicans do not agree to raise the limit on government borrowing.
“If congressional Republicans refuse to pay Americans’ bills on time, Social Security and veterans benefits will be delayed. We might not be able to pay our troops,” Obama said, ratcheting up the rhetoric over the looming deadline to raise the $16.4 trillion debt ceiling. “Investors around the world will ask if the United States is, in fact, a safe bet. Markets would go haywire. It would be a self-inflicted wound on the economy. It would slow down our growth.”
In his final news conference of his second term, the president added: “To even entertain this happening — the United States not paying its bills — is irresponsible. It’s absurd.”
Obama said he still wanted to reach a compromise to stabilize borrowing over the long-term but would not negotiate over the debt ceiling, which covers obligations that Congress has already made.
“If we combine a balanced package of savings from health care and revenues from closing loopholes, we can solve the deficit issue,” Obama said. “The American people made a clear decision about the approach they prefer. They don’t think it’s smart to protect endless corporate loopholes and tax breaks” for the wealthiest Americans rather than repair the nation’s infrastructure.”
Less than a week before Obama is inaugurated for a second term, the comments set up a collision course with Republicans, who insist that the debt-ceiling debate offers a crucial source of leverage to force spending cuts. Without a resolution, the U.S. and global economies face serious risks.
Other issues in Obama’s second-term agenda include a rewrite of the nation’s gun laws, an overhaul of immigration policy and perhaps action on climate change. Vice President Biden plans to release the administration’s recommendations to reduce gun violence on Tuesday.
The government has already technically reached the debt limit, which is a legal cap on borrowing. But the Treasury Department is undertaking a series of “extraordinary measures,” which allow it to continue to finance operations for approximately two additional months. As a result, Congress and Obama are likely to have until late February or early March to raise the debt ceiling.
Should they fail, the government would quickly be at risk of an unprecedented default on the debt. Such an outcome would have consequences for global financial markets, where Treasury bonds play a critical role, as well for any one who receives payments from the government.
Even as Obama hopes to begin work on immigration and new gun laws, the debate over the debt limit is likely to be the most pressing issue in coming weeks. Obama and Congress also face other looming fiscal deadlines — including $1.2 trillion of deep spending cuts set to begin taking effect in March and a deadline later that month to pass a new resolution funding the government for the next year.
Obama says he won’t negotiate over the debt limit but would prefer to replace the deep spending cuts, known as sequestration, with a package of tax hikes and reforms to entitlement programs.
A growing number of Republicans say they see the debt-limit battle as a critical source of leverage and are warming to the idea of either allowing sequestration to take effect or shutting down the government — all in hopes of forcing federal spending reductions that they see as central to the nation’s fiscal future.
Obama will again address the nation next Monday, when inaugural festivities are held, and Feb. 12, in his State of the Union address. (Obama will formally be inaugurated Jan. 20, a Sunday.)
Obama: No negotiations with GOP over debt ceiling
This article
Obama: No negotiations with GOP over debt ceiling
can be opened in url
http://newsswathing.blogspot.com/2013/01/obama-no-negotiations-with-gop-over.html
Obama: No negotiations with GOP over debt ceiling
