US President Barack Obama urged lawmakers to raise the country’s US$16.4 trillion federal debt limit quickly, warning that benefits that the elderly and military veterans rely on will be affected if they do not and warning Republicans against demanding government spending cuts in exchange for not “crashing the economy.”
Obama said he was willing to negotiate with Republican leaders about reining in deficit spending, but insisted that those talks be separate from decisions to raise the debt ceiling and avert a possible first-ever national default.
“We are not a deadbeat nation,” he said on Monday, less than a week away from his second term.
In addition to the possible effects on older Americans and veterans, Obama listed a litany of possible consequences if the US Congress fails to raise the debt ceiling, including sending the economy back into recession.
Obama warned that Republicans who want to dramatically cut spending in return for raising US borrowing limits “will not collect a ransom in exchange for not crashing the economy.”
Obama’s remarks were in line with a newly toughened stance toward Congress which was settling in for its own new term. The new Congress is expected to be as divided as the last, though Republicans face a smaller majority in the US House of Representatives and Democrats will have a bigger majority in the US Senate.
“The American people do not support raising the debt ceiling without reducing government spending at the same time ... The House will do its job and pass responsible legislation that controls spending, meets our nation’s obligations and keeps the government running ... ” House of Representatives Speaker John Boehner said in a statement.
Obama said he would consider future spending cuts to reduce the deficit, but only if they are done independently from the debt limit.
“The full faith and credit of the United States of America is not a bargaining chip,” he said. “And they better decide quickly because time is running short.”
Underscoring the urgency, US Secretary of the Treasury Timothy Geithner said in a letter to Boehner that the government may exhaust its borrowing limit as soon as the middle of next month, earlier than expected. The Treasury has been using bookkeeping maneuvers to keep from surpassing the debt ceiling, but Geithner said those measures will be exhausted by next month or early March.
Lawmakers face three deadlines before April 1: The debt limit must be raised to prevent a default, across-the-board spending cuts are to kick in on March 1 and funding for most government programs runs out on March 27.