Obama: Not raising debt limit "absurd", "financial disaster"

President Obama holds a press conference in the East Room of the White House January 14, 2013 in Washington, D.C. / BRENDAN SMIALOWSKI / AFP / Getty Images

President Obama today shot down Republican threats to let the federal government default on its loans, saying, "To even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It's absurd."

"We've got to pay our bills," Mr. Obama said in a White House news conference. He reiterated that while he is willing to compromise over plans for deficit reduction, he will not accept using the debt limit as a bargaining chip.

"They will not collect a ransom in exchange for not crashing the American economy," he said of Republicans. "The full faith and credit of the United States of America is not a bargaining chip."

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Obama: Not raising debt ceiling "absurd"

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Obama blasts "absolutist" Congress in debt ceiling fight

Within a matter of weeks, Washington is likely to be embroiled in debate over three fiscal issues: The Treasury Department is expected to hit its $16.4 trillion debt limit by mid-February or early March, the $1.2 trillion in "sequester" cuts are set to go into effect on March 1, and the "continuing resolution" that funds the federal government is set to expire on March 27.

The risk of failing to address any of these issues is high, but failing to raise the debt limit poses the greatest threat: By failing to do so, Congress would risk letting the government default on its loans, which economists say would have disastrous consequences.

Mr. Obama stressed today that raising the debt ceiling would not authorize new spending.

"It simply allows the county to pay for spending that Congress has already committed to," he said. "These are bills that have already been racked up... You don't go out to dinner, then eat all you want and then leave without paying the check."

The president quoted House Speaker John Boehner on the issue, who last year said letting the government default would be "a financial disaster not only for us, but for the worldwide economy."

The president ran through a list of the economic consequences of default, noting, "Social Security checks and veterans' benefits will be delayed. We might not be able to pay our troops or honor or 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... It would be a self-inflicted wound on the economy, it would slow down our growth might tip us into recession, and ironically, might increase our deficit."

In response to the president's news conference today, Boehner said the House will "do its job" and pass legislation to keep the government running and pay its bills -- along with cutting spending.

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[berry_straw]

how about stopping aid to fascist Israel. That would easily cop of a trillion over a couple of years.

[Emet-v-Chesed]

Thank you, Mr. President.

[bbglow]

It's difficult to accept the truth when the lies are exactly what you wanted to hear.

[bbglow]

It's time for the GOP/RNC to accept there contribution to the national debt ...

The Pew Center reported in April 2011 the cause of a $12.7 trillion "shift" in the debt situation "from a 2001 CBO forecast of a cumulative $2.3 trillion surplus by 2011" to the estimated $10.4 trillion public debt we actually faced in 2011. The major drivers were:

Revenue "declines due to the recession", separate from the Bush tax cuts of 2001 and 2003: 28%
Defense spending increases: 15%
Bush tax cuts of 2001 and 2003: 13%
Increases in net interest: 11%
Other non-defense spending: 10%
Other tax cuts: 8%
Obama Stimulus: 6%
Medicare Part D: 2%
Other reasons: 7%

[TimeToEvolve]

Warning warning, Republicon economic terrorists working for Wall Street on the loose. Hide your money poor and middle class.

[parisdakar]

What kind of bizarro financial world does he live in? Does he know what 'debt' is?

[TimeToEvolve]

Talk to the Congress, they are responsible for all the spending.

[bbglow]

It's difficult to accept the truth when the lies are exactly what you wanted to hear.

[tsigili]

The financial disaster occurred when Obama was elected to office. Disaster for America.

[drunk_dan]

Yep, because there was no unemployment, no crash of the banking system, no wars, no borrowing from China, no deficit spending until the day after Obama was sworn in. LMFAO

What color is the sky in tsigili world?

[zenia5]

@tsigili......what are you smoking???

[TimeToEvolve]

I most like the part when President Obama asks the House to do its job which is to fund the government and control spending.

[Social_Adjudicator]

One thing that many seem to misunderstand is that these "bills" that are to be left unpaid if the debt ceiling isn't raised, may be for goods that were contracted and the money appropriated for, but have yet to be produced or delivered. Cancelling contracts would not be out of order if the goods can't be paid for without raising the debt ceiling and borrowing more money, because of contract renegotiating mid-fiscal term or sideshow activities diverting the funds for other than what they were appropriated for; all of which has been observed many times over. Don't be fooled by the Politicians who are wanting to stay in good graces with the Communist Masses. It's all politics with the American People caught in the cross-hairs.

[libclubber]

In his own words - the president is unpatriotic.

[TimeToEvolve]

In what way?