By Matea Gold
3:00 AM PST, January 5, 2013
WASHINGTON — Fresh off this week’s last-minute “fiscal cliff” deal, President Obama on Saturday dug in as the prospect of another budget clash with congressional Republicans loomed, warning that he will not negotiate over raising the nation’s debt limit.
“One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up,” Obama said in his weekly address. “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 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.”
Obama’s stance puts him squarely at odds once again with newly reelected House Speaker John A. Boehner (R-Ohio), who told a closed-door meeting of Republican lawmakers Friday that he will insist on a dollar-per-dollar match between spending reductions and continued borrowing. Senate Minority Leader Mitch McConnell (R-Ky.) has expressed a similar sentiments.
Treasury Secretary Timothy F. Geithner notified Congress earlier this week that the nation has already hit its $16-trillion debt limit, and Congress will be asked soon to raise the borrowing authority to continue paying the nation's bills.
The situation pits Obama and his congressional opponents in another tense showdown – this one with potentially even more serious economic consequences.
“Our economy can’t afford more protracted showdowns or manufactured crises,” Obama warned in his weekly address, adding that “the messy brinksmanship in Congress made business owners more uncertain and consumers less confident.”
The president said he was open to seeking spending cuts generally as part of an effort to reduce the country’s deficit, but he stressed that such reductions can be made “without shortchanging things like education, job training, research and technology all which are critical to our prosperity in a 21st century economy.”
“Spending cuts must be balanced with more reforms to our tax code,” he said. “The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.”
Obama cast the terms of the fiscal cliff compromise as a fulfillment of his campaign promise to create a more equitable tax system.
“Over the past year, as I traveled across the country campaigning for this office, I told you that if I was fortunate enough to be reelected, I’d work to change a tax code that too often benefited the wealthy at the expense of the middle class,” he said. “This week, we did that.”
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