President Obama on Monday aggressively attacked the GOP's reluctance to raise the debt ceiling, saying the opposition's all-or-nothing approach to budget negotiations could lead to a "self-inflicted wound on the economy." At the final news conference of his first term, Obama criticized the Republican position as reckless, absurd, and against the interests of the American people.
GOP leaders in recent weeks have demanded that any lifting of the debt ceiling coincide with dollar-for-dollar spending cuts, which Obama equated with holding a "gun to the head of the American people."
"They will not collect a ransom in exchange for not crashing the American economy," he pledged. "We have never seen the debt ceiling used in this fashion."
In a news conference that sometimes resembled a civics lesson for the Washington press corps, Obama sought to uncouple the issue of the debt ceiling from the budget, refuting Republican suggestions that authorizing more borrowing would result in more spending. "This is about paying your bills," Obama said. "We are not a deadbeat nation."
"Raising the debt ceiling does not authorize more spending," Obama continued. "These are bills that have already been racked up, and we need to pay them." Obama noted that the U.S.'s spending obligations — to pay soldiers, Social Security recipients, air-traffic controllers, and more — have already been passed by Congress. Obama compared the situation to diners at a restaurant who dash when the bill comes.
Obama also warned that breaching the debt ceiling would be a catastrophe for a recovering economy. "We are poised for a good year," Obama said, before listing a slew of negative repercussions from a debt default, such as markets going haywire, soaring interest rates, ripples in the global economy, a credit downgrade, and — ironically enough — a spike in the budget deficit. He reiterated his commitment to reducing the deficit in a "balanced" way, while noting that his administration had closed the deficit by $2.5 trillion in the past two years through spending cuts and lower interest rate payments.
Obama maintained that there was no Plan B — such as a $1 trillion coin, or unilateral action under the 14th Amendment — to raise the debt ceiling over Republican opposition. "There are no magic tricks here, no loopholes, no easy outs," he said.
Obama's remarks represent the firmest position he has taken on the debt ceiling, which is expected to be met in late February or early March. By framing the debate as one about paying the country's bills, he is virtually challenging the GOP to side against soldiers, Social Security recipients, and others.
Republicans responded by continuing to equate a debt ceiling hike with runaway spending. "The American people do not support raising the debt ceiling without reducing government spending at the same time," said House Speaker John Boehner (R-Ohio).