Monday saw the news that the U.S. president refused to negotiate with Republicans over raising the debt ceiling, accusing them of trying to extract a ransom for not ruining the economy in the latest fiscal talks.
At a White House news conference set to promote his position on the budget, President Obama promised not to trade cuts in government spending asked by Republicans in exchange for raising the borrowing limit.
“What I will not do is to have that negotiation with a gun at the head of the American people,” Mr Obama said.
With a recent decision over the so-called fiscal cliff, Washington is already trying to solve another problem: the debt ceiling, which sets a limit on how much the government can borrow.
President Obama has tangled repeatedly with Congress over budget and spending issues and vowed that Republicans would bear the responsibility for the consequences of a default, reports Reuters.
“They can act responsibly, and pay America’s bills or they can act irresponsibly, and put America through another economic crisis,” he said. “But they will not collect a ransom in exchange for not crashing the American economy.”
Republicans are seeking to cut some spending to rein in the deficit before they agree to raise the borrowing ceiling again.
As Senate Republican leader Mitch McConnell said, Obama must get “serious about spending and the debt limit is the perfect time for it.”
“The American people do not support raising the debt ceiling without reducing government spending at the same time,” said the House of Representatives speaker, John Boehner.
The last debt ceiling fight year ago upset world financial markets. The U.S. president cast the borrowing issue as one that will affect many Americans and sensitive industries.
“If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans’ benefits will be delayed.”
He went on, adding: “We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear material wouldn’t get their paychecks.”
Monday the president mentioned some of the consequences of not raising the debt limit: the inability to pay U.S. troops or honor contracts for small business owners, air traffic controllers and food inspectors.
Mr Obama continued, arguing that if the country failed to meet these obligations, its credibility will be questioned by the world’s investors.
“We are not a deadbeat nation,” Obama said. “So there’s a very simple solution to this: Congress authorizes us to pay our bills.”
Soon after the president’s press conference, Republicans responded to Obama’s allegations signaling they will not relent on demands for spending cuts as part of debt ceiling talks.
“The President and his allies need to get serious about spending, and the debt-limit debate is the perfect time for it,” said Senate Minority Leader Mitch McConnell (R-Ky.) in a statement.
“I do know that the most important issue confronting the future of our country is our deficit and debt. So we are hoping for a new seriousness on the part of the President with regard to the single biggest issue confronting the country and we look forward to working with him to do something about this huge, huge problem.”
Speaker Boehner issued a similar statement, calling on Obama to reduce government spending.
“The House will do its job and pass responsible legislation that controls spending, meets our nation’s obligations and keeps the government running, and we will insist that the Democratic majority in Washington do the same,” the Speaker said.