President Obama warned congressional Republicans on Monday that raising the federal debt ceiling is non-negotiable and that he will not engage in another partisan debate over whether the country should meet its financial obligations.
Obama used the final news conference of his first term to tell a divided Congress to raise the borrowing limit in the coming weeks or risk turning the United States into what he called “a deadbeat nation.”
Invoking his recent reelection victory as proof that the American people support his broader approach to taxes and spending, he said that, in return for doing so, House Republicans would receive nothing.
“The financial well-being of the American people is not leverage to be used,” the president said from the East Room of the White House. “The full faith and credit of the United States of America is not a bargaining chip.”
Less than a week before Obama takes the oath of office for a second term, his position sets him on a collision course with a determined House Republican majority, whose members insist that the debt-ceiling debate offers them leeway to force deep spending cuts.
House Speaker John A. Boehner (R-Ohio) has said that Congress must cut spending as much as any increase in the debt limit. He also has insisted that Americans will not tolerate Congress raising the borrowing limit without changes in entitlement programs, such as Medicare and Social Society, that would slow the growth of government spending.
But Boehner has promised rank-and-file Republicans that he will not participate in high-level talks with Obama, which many House members think have been fruitless over the past two years. His position, like the one Obama articulated Monday, leaves the White House and Congress at odds over how to proceed with only weeks left before the nation will bump up against the $16.4 trillion borrowing limit.
Congress must raise the debt ceiling by mid-February or risk a government default, which could have a devastating effect on the nation’s credit rating and global markets. Obama and other Democrats say no conditions should be attached to paying government bills, but Republicans disagree.
“The American people do not support raising the debt ceiling without reducing government spending at the same time,” Boehner (Ohio) said in response to Obama’s remarks. “The consequences of failing to increase the debt ceiling are real, but so, too, are the consequences of allowing our spending problem to go unresolved.”
Obama’s attempt to make raising the borrowing limit entirely a matter for an unpopular Congress to address marks a shift from the central role he played in 2011, when he was drawn into a summer-long debate over the issue that badly damaged his political standing ahead of an election year.
Congress eventually raised the limit, but for the first time, a credit agency downgraded U.S. debt partly because of the political uncertainty those talks created.
The balance Obama is trying to strike — involvement without seeming to be involved — shows how difficult it will be for him to ignore an issue that could have such a calamitous effect on the U.S. economy, which he said Monday is “poised for a good year.”
Obama used some of his most vivid language in describing what Americans could experience if the debt ceiling is not raised. He said U.S. troops may not get paid, Social Security checks and benefits for veterans would be delayed, and world financial markets "could go haywire."
“It would be a self-inflicted wound on the economy,” Obama said. “It would slow down our growth, might tip us into recession. And, ironically, it would probably increase our deficit.”
After winning reelection, Obama tried to extend the debt limit during negotiations to avert year-end tax increases and spending cuts known collectively as the “fiscal cliff.” But the two sides were unable to reach an accord.
Since then, Obama has said he would participate in negotiations over tax rates, spending cuts and deficit reduction, including how to avoid $1.2 trillion in cuts set to take effect in early March. But he insisted Monday that he will not engage periodically in discussions over whether the country would default on its debt.
White House officials know privately that Obama will be asked to participate in the debt-ceiling talks, and they think his victory in forcing House Republicans to raise some taxes in the fiscal-cliff deal will help them exert behindthe-scenes influence on this round.
Polls showed that Obama, who secured higher tax rates for the wealthy in the fiscal cliff negotiations, emerged in a better position than House Republicans.
“We are stronger for the debt fight because we won the fiscal cliff fight,” said one senior administration official, who spoke on the condition of anonymity to describe what the White House is thinking. “That’s how we’re going to look at this.”
Obamaindicated as muchMonday with a strong defense of his spending priorities, a relatively liberal mix of safety-net protection and money for education, scientific research and other areas that he thinks will help modernize the economy.
He said the ideological contest over his and the Republican Party’s visions of government’s role is at the heart of the debt-ceiling debate, rather than a good-faith discussion about ways to reduce the deficit. The larger debate, he has argued, should be separate from the borrowing-limit talks.
Obama cast House Republicans as “suspicious about government’s commitments, for example, to make sure that seniors have decent health care as they get older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research.”
He added: “So they’ve got a particular view of what government should do and should be. And, you know, that view was rejected by the American people when it was debated during the presidential campaign.”
Obama’s remarks were the latest instance of what his advisers have described as an outside-in approach to governing, one that leverages popular support in the country for his position into pressure on Republicans in Congress.
“If we continue down this path,” Obama said, referring to regular brinkmanship over raising the borrowing limit, “there’s really no stopping the principle.”
He has a busy legislative agenda to push and a small window of time to accomplish it before his reelection popularity turns into lame-duck irrelevance.
At the news conference, Obama was asked whether he intends to change the perception that his administration is too insular and that, as a politician, he doesn’t cultivate enough political friends to help with his agenda.
Part of Obama’s appeal in 2008 was his pledge to rise above Washington’s partisan antagonism, limit the power of lobbyists and bring a new way of governing to the capital. But on Monday, he attributed his perceived isolation in the White House to the partisanship that he had hoped to change.
“I’m a pretty friendly guy, and I like a good party,” he said. “I think that really what’s gone on in terms of some of the paralysis here in Washington, or difficulties in negotiations, just have to do with some very stark differences in terms of policy.”
He joked that he’ll have more time to work on other relationships now that “my girls are getting older.” “They don’t want to spend that much time with me anyway,” he said. “So I’ll be probably calling around, looking for somebody to play cards with me or something, because I’m getting kind of lonely in this big house.”
January 15, 2013
Raising borrowing limit not negotiable, president tells lawmakers
By Zachary A. Goldfarb and Philip Rucker
Scott Wilson and Rosalind S. Helderman contributed to this report.