President Obama Addresses Nation About Debt Ceiling [Video]

President Barack Obama criticized a newly minted Republican plan to avert an unprecedented government default Monday night and said that congressional leaders must produce a compromise that can reach his desk before the August 2 deadline.

President Barack Obama criticized a newly minted Republican plan to avert an unprecedented government default Monday night and said that congressional leaders must produce a compromise that can reach his desk before the August 2 deadline.

In his seventh prime time televised address, Obama sought to increase pressure for congressional leaders to reach a deal that would allow the government to continue borrowing money to pay its debts after August 2.

“The American people may have voted for divided government, but they didn’t vote for a dysfunctional government,” Obama said.

“So I’m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message. It’s a dangerous game we’ve never played before and we can’t afford to play it now,” Obama said.

Obama said the approach unveiled earlier in the day by House Speaker John Boehner would raise the nation’s debt limit only long enough to push off the threat of default for six months. “In other words, it doesn’t solve the problem,” he said.

“The debate right now isn’t about whether we need to make tough choices.  Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done.”

“Most Americans, regardless of political party, don’t understand how we can ask a senior citizen to pay more for her Medicare before we ask a corporate jet owner or the oil companies to give up tax breaks that other companies don’t get.”

“How can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries?  How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don’t need and didn’t ask for?”

Obama also warned that we could be facing a “deep economic crisis.” “Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach.”

“If that happens, and we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses.”

“For the first time in history, our country’s Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet.  Interest rates would skyrocket on credit cards, on mortgages and on car loans, which amounts to a huge tax hike on the American people.  We would risk sparking a deep economic crisis – this one caused almost entirely by Washington.”

Barack Obama stressed the need for a bipartisan solution and reminded Washington that compromise is not “a dirty word.” He spoke to the frustrations ordinary Americans feel with the political process.

“They’re fed up with a town where compromise has become a dirty word.  They work all day long, many of them scraping by, just to put food on the table.”

“And when these Americans come home at night, bone-tired, and turn on the news, all they see is the same partisan three-ring circus here in Washington.  They see leaders who can’t seem to come together and do what it takes to make life just a little bit better for ordinary Americans.  They are offended by that. And they should be.”

He also reminded Americans that history celebrates leaders who “put aside pride and party to form a more perfect union.”

“We remember the Americans who put country above self, and set personal grievances aside for the greater good.  We remember the Americans who held this country together during its most difficult hours; who put aside pride and party to form a more perfect union.”

“That’s who we remember.  That’s who we need to be right now.  The entire world is watching.  So let’s seize this moment to show why the United States of America is still the greatest nation on Earth – not just because we can still keep our word and meet our obligations, but because we can still come together as one nation.”

“The only reason this balanced approach isn’t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a different approach, a cuts-only approach — an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all,” Mr. Obama said in his address.

“And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about — cuts that place a greater burden on working families.”

In response to Mr. Obama, Mr. Boehner said: “The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today.  That is just not going to happen.”

“We’re about to go over the cliff,” Senator Harry Reid, the Nevada Democrat who serves as majority leader, said Monday afternoon as he outlined his plan.

Mr. Reid dismissed the House Republican plan as a “nonstarter” and said Republicans were essentially trying to embarrass Mr. Obama in the middle of the 2012 election year by forcing another debt limit showdown. He said Democrats would not go along with any plan that did not guarantee a debt limit increase through next year.

The United States has had a debt ceiling since the First World War, when it first went into the bond market big time. It has raised it from time to time ever since. When the same party controls the White House and Congress, this is usually a routine matter. The majority party raises the debt limit and the minority party casts cheap-shot votes against it (as then Senator Barack Obama did in 2006).

When one party has the White House and the other has majorities in one or both houses of Congress, things can get more dicey. The opposition party sometimes demands concessions in return for casting unpleasant votes for what is seen as a necessary measure. [via The New York Times, CNN, The White House and The Telegraph]

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