Washington – President Barack Obama on Monday rejected any negotiation with Republicans over the most pressing U.S. fiscal issue, refusing to trade cuts in government spending in exchange for raising the borrowing limit.
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“If the goal is to make sure that we are being responsible about our debt and our deficit – if that’s the conversation we’re having, I’m happy to have that conversation,” Obama said. “What I will not do is to have that negotiation with a gun at the head of the American people,” he told a news conference.
Republican leaders quickly reiterated their demand that increasing the debt limit must be accompanied by spending cuts.
With an agreement to prevent the so-called fiscal cliff of sharp spending cuts and tax increases barely two weeks old, Obama faces another fiscal showdown with congressional Republicans.
A trio of deadlines looms around the end of February: the need to raise the debt ceiling, automatic deep spending cuts temporarily put off in the fiscal cliff deal, and the end of a stopgap government funding measure.
The United States could default on its debt if the borrowing limit is not increased.
Some Republicans have said they would require dollar-for-dollar spending cuts to match any increase in the debt limit. Obama’s unexpected news conference could have been a pre-emptive strike aimed at influencing strategy sessions among Republican lawmakers scheduled for later this week.
A number of Republicans have said they would be willing to allow a U.S. debt default or a government shutdown to force the Obama administration to accept deeper spending cuts than the White House would like.
Obama said he would agree to talk about steps to trim the U.S. budget deficit, but made clear he wants to keep that discussion separate from the debt ceiling increase. He held to his position that deficit reduction should include measures to raise revenue and not come from spending cuts alone.
Republicans have rejected that approach, saying the fiscal cliff deal, which raised taxes for the wealthy while maintaining low tax rates for most Americans, should have put to rest the discussion over tax increases.
Obama must get “serious about spending and the debt limit is the perfect time for it,” Senate Republican leader Mitch McConnell said in a statement just moments after Obama’s news conference ended.
Republican John Boehner, the House of Representatives speaker, said: “The American people do not support raising the debt ceiling without reducing government spending at the same time.”
If Congress fails to raise the U.S. debt limit, the Treasury Department will become unable to borrow money to pay for government spending obligations, leading to a debt default that would damage U.S. credit and have wide repercussions in financial markets around the world.
Protracted haggling over raising the debt ceiling in 2011 brought the nation close to default and resulted in a credit rating downgrade and financial market turmoil that slowed economic recovery.
Fiscal issues loomed large during the final news conference of Obama’s first term, which came a week before a gala inauguration ceremony that will launch his next four years. Fights with Congress over taxes and spending have overshadowed much of his domestic agenda over most of the last two years with the president facing legislative gridlock that shows little sign of abating.
Obama raised the specter of a severe setback to the U.S. economy if congressional Republicans persist with the threat of a debt default.
“It would be a self-inflicted wound on the economy,” he said. “Even entertaining the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd.”
since the spoil brat;obama was elected pres who has not negotiate with anybody. he is not going to negotiate good maybe the debt will have reached it’s peak. if you give the……..he will be demanding more next week. I did not let my kids do it why should obama do it
Good, don’t negotiate. Have it your way big baby O.
to #3 – u don’t have any idea of the definition of the word DEBT – it means when u spend more than what you have you go into DEBT – that’s exactly what Obama is doing – it has nothing to do with wall street.
JUST STOP SPENDING WHAT YOU DON”T HAVE AND YOU”LL ELIMINATE THE DEBT
I realize the temptation is to borrow and borrow more and more but at some point we have to pay it back. Let’s cut the spending at least some to balance what we are borrowing with what we spend so the thing doesn’t get worse and starts to pay the debt down. Just like individuals the government has an obligation to pay back its debt. And by the way, religion isn’t responsible for starting wars, it’s nations stiffing each other by not paying back debt and the other nations get angry and tries to take it over.
The best thing to come would be a shut down of the government by the neofascist tea baggies which may ensure a democratic takeover of the Congress and solve the problem
and the government ordering to give mortgages to people who can’t afford them.
Wow! I would like to negotiating my own debts on these terms…
There is tremendous waste in government. For example, there is a U.S. -Canadian Boundary Commission, with a highly paid Administrator. Why do we need such an obsolete commission? Are Canada and the USA engaged in a dispute over the border? Secondly, why does the U.S. Capital building have elevators operators? There have been automatic self-service elevators is use for over 55 years. The elevator operators are just part of the governmental waste. Third, although there was an effort by the Clinton Adminstration in the late 1990’s to trim the size of the federal civilian labor force, it appears that the reverse has occurred in recent years. Fourth, there are too many armchair generals and admirals at the Pentagon, who push papers; they should be retired. Fifth, get rid of the TSA, and hire private contractors. The TSA has never caught one terrorist! Sixth, there has to be severe consequences to federal officials who are caught wasting millions of dollars on lavish getaways, called “meetings”.
The Republican mantra “the invisible hand” regulated very well their own pockets, Fuld from Lehman walked away with millions, AIG the biggest thief is suing the government for not giving more in the rescue. It is like a child who killed his parents and pleades for mercy as an orphan
We are missing the point here. The President has no authority to authorize government spending, only Congress can do that. The President prepares a budget, and Congress can approve, reject, or revise it – they decide what money gets spent where. Once approved, the President has no authority to make changes – this would constitute a line-item veto which would obviate the point of separating the spending from the authorization.
If Congress has an issue with the budget, they should address it during budget negotiations. Once the budget is approved, the government spends, and takes on numerous liabilities. What we are talking about here is the default on our obligations. We may hate it, and it may be abhorrent to us, but the deal is done and, in many cases, services already provided. We owe and must pay. We cannot choose not to pay the various suppliers to the US Govt who in many cases have already delivered their goods and services.
There may be a spending issue. Let Congress deal with that issue, instead of defaulting on our debt and driving down our credit ratings further.