In the last press conference of his first term, President Obama set the stage for the battle over the debt limit by stating in stark terms that he believes it is Congress’ responsibility to pay for the spending they have already approved.
After noting that the economy is growing and would keep growing “as long as Washington politics don’t get in the way of America’s progress,” his tone was stern and confrontational as he declared his intention to use the beginning of his second term to stop the trend of America moving from “crisis to crisis to crisis.”
“The issue here is whether or not America pays its bills,” Obama said. “We are not a deadbeat nation.”
“These are bills that have already been racked up, and we need to pay them,” he insisted, speaking to reporters in the East Room at the White House. “So, while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.”
Republicans used the debt limit in the summer of 2011 to demand spending cuts that included the so-called sequestration, which is still scheduled to go into effect in the early part of this year.
Though some Republicans have argued that hitting the debt limit wouldn’t necessarily trigger a default, the president was definite that refusal to raise the limit would have catastrophic effects.
“If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed,” he said.
“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 materials, wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money. Every homeowner with a mortgage, every student with a college loan, every small-business owner who wants to grow and hire.”
To even suggest such a scenario, the president argued, hurts the economy. So while he will work to build on the $2.5 trillion in cuts to the deficit he has already signed, he vowed not to negotiate when it comes to raising the debt limit.
“What I will not do is to have that negotiation with a gun at the head of the American people — the threat that unless we get our way, unless you gut Medicare or Medicaid, or, you know, otherwise slash things that the American people don’t believe should be slashed, that we’re going to threaten to wreck the entire economy. That is not how historically this has been done. That’s not how we’re going to do it this time.”
The president did vote against raising the debt limit once when he was in the Senate, though it still passed easily.