Obama: Not raising debt ceiling could be "catastrophic"

President Obama sternly warned congressional Republicans today that if they don't agree to raise the debt ceiling next month, the consequences could be "catastrophic."

"If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic," the president said in his weekly address. "The last time Congress threatened this course of action, our entire economy suffered for it. Our families and our businesses cannot afford that dangerous game again."

House Ways and Means Committee chairman Rep. Dave Camp, R- Mich., in the Republicans' address suggested simply raising the debt ceiling isn't the answer - major spending cuts are.

"Many of our Democrat colleagues just don't seem to get it," Camp said. "Throughout the fiscal cliff discussions, the President and the Democrats who control Washington repeatedly refused to take any meaningful steps to make Washington live within its means. That position is irresponsible and fails to acknowledge what every family in America already knows - when you have no more money in your account and your credit cards are maxed out, then the spending must stop."

The president also fired a shot across the bow of Republicans who would like to believe that this week's "fiscal cliff" agreement put the tax issue to rest, signaling that any further deficit reduction efforts must again include tax reform that asks the wealthy to pay more. "Spending cuts must be balanced with more reforms to our tax code," said the president. "The wealthiest individuals and biggest corporations shouldn't be able to take advantage of loopholes and deductions that aren't available to most Americans."

It seems this is an issue in which Mr. Obama and congressional Republicans can at least begin to have a conversation. Camp echoed the president on tax reform saying, "we have to start to work on real solutions to return accountability to our tax code by eliminating special interest loopholes."

"I believe in a simple principle," Camp continued. "When it comes to the tax code, everyone should play by the same rules. Your tax rate should be determined by what's fair, not who you know in Washington."