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Politics & Government

President Obama warns debt ceiling default would hurt US globally

Lesley Clark - McClatchy Washington Bureau

October 08, 2013 02:49 PM

President Obama called on House Speaker John Boehner to call a vote on a bill that would end the 8-day old government shutdown without affecting his signature health care law.

"Two of their very basic jobs are passing a budget and making sure that America's paying its bills," Obama said of Congress. "They don't also get to say, 'You know, unless you give me what the voters rejected in the last election, I'm going to cause a recession.' That's not how it works."

Obama added that "no American president would deal with a foreign leader like this. Most of you would not deal with either coworkers or business associates in this fashion. We shouldn't be dealing this way here in Washington."

He noted that Republicans have said their demand to repeal or revise the Affordable Care Act is reasonable.

"But as I've said before, imagine if a Democratic Congress threatened to crash the global economy unless a Republican president agreed to gun background checks or immigration reform," Obama said. "I think it's fair to say that Republicans would not think that was appropriate."

He said Republicans have decided to run out the clock until the government shutdown or the possibility of default, "thinking that it would give them more leverage."

But he said the stance has hurt the U.S, forcing him to cancel his trip to Asia. He called the cancellation a short term problem, but said "it makes us look like we don't have our act together."

And he warned that although some people are feeling the effects of the shutdown, it would pale in comparison to a default if Congress doesn't raise the debt ceiling.

"As reckless as a government shutdown is, the economic shutdown caused by America defaulting would be dramatically worse," Obama said. 

He said in a government shut down, "millions of Americans face inconvenience or outright hardship," but that if Congress doesn't raise the debt ceiling, "every American could see their 401ks, and home values fall, borrowing costs for mortgages and student loans rise."

He said it would create a "significant risk of a very deep recession at a time when we're still climbing our way out of the worst recession in our lifetimes."

He didn't rule out signing a short term fix of several weeks, saying "the only thing that I will say is that we're not going to pay a ransom for America paying its bills...Everybody should say one of the most valuable things we have is America's creditworthiness. This is not something we should even come close to fooling around with."

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