WASHINGTON — President Barack Obama warned Republican foes Wednesday he would not let Congress hold the US economy “hostage” with a debt-ceiling row like the one that nearly paralyzed Washington last year.
Obama hosted House Speaker John Boehner and other top lawmakers for a White House lunch where much of the discussion focused on the mounting pressure over how to unclog a fiscal logjam at year’s end, including expiring tax provisions, a looming debt ceiling, and automatic military cuts.
The president demanded a “serious bipartisan approach” to avoid a repeat of last year’s crisis which pushed the country to the edge of default and led to its first-ever credit downgrade.
“The president made clear… that we’re not going to recreate the debt ceiling debacle of last August,” when Republican-led congressional gridlock nearly shut down the federal government, Obama’s spokesman Jay Carney said.
“It is simply not acceptable to hold the American and global economy hostage to one party’s political ideology.”
Boehner sounded a warning shot Tuesday, signaling he wanted a showdown with Democrats as early as this summer — in the middle of the election campaign — over the US debt ceiling, which is scheduled for an increase at year’s end.
He said the House would not agree to raise the debt ceiling unless such an increase is matched by equal spending cuts, but on Wednesday insisted to reporters that “I am not threatening default.”
But Obama’s Republican rival in the 2012 election, Mitt Romney, piled on, blasting the president for his inability to put out a “spending and borrowing inferno” that has threatened fiscal stability.
“I’m concerned about this country. I’m concerned about the debt. I’m concerned about the spending,” Romney told supporters in St. Petersburg in the key battleground state of Florida, as he built on his previous day’s accusations that Obama has done nothing to rein in soaring national debt.
“I find it incomprehensible that a president could come to office and call his predecessor’s record irresponsible and unpatriotic, and then do almost nothing to fix it and instead every year to add more and more and more spending,” the presumptive Republican nominee said.
Obama brought a peace offering of sorts to the White House lunch: sandwiches which he purchased at a local shop where he had held a roundtable to press for legislative action to promote small businesses.
Boehner focused on the bigger picture and “asked the president if he is proposing that Congress pass an increase that does not include any spending cuts to help reduce the deficit. The president said ‘yes,’” a Boehner aide said in a readout of the meeting.
Boehner responded: “As long as I’m around here, I’m not going to allow a debt ceiling increase without doing something serious about the debt,” the aide added.
Boehner also asked Obama about his plans to deal with what he called “the largest tax increase in American history” when Bush-era tax cuts expire as scheduled at year’s end, as well as sweeping cuts poised to hit the US military.
Last year’s Budget Control Act mandates a so-called sequester, in which $600 billion in defense cuts and $600 billion in cuts to non-security spending over 10 years are imposed if Congress doesn’t agree on $1.2 trillion in discretionary spending cuts.
But Senate Majority Leader Harry Reid, who attended the lunch, cautioned that a debt ceiling increase likely would not be necessary until early 2013, and any discussion of it would be “premature” until after the sequester takes effect or Congress takes measures to avoid it.
“Senator Reid thought it was unfortunate to see Republican leaders engaging in the same kind of brinksmanship that led to a slump in economic confidence and a downgrade of the US credit rating last year,” a Senate Democratic aide said.
At the sandwich shop in Washington, Obama touted his effort to help jumpstart new hirings through legislation that gives a 10-percent income tax credit for firms that create new jobs.
“The economy is recovering, but we’ve still got a long way to go. Too many folks are still out of work. We’ve got some headwinds, the situation in Europe, and still a difficult housing market,” Obama said.
“One of the ways that we can sustain momentum is for Congress to take some actions right now — even though it’s election season, even though there’s gridlock, even though there’s partisanship — take some actions right now that would really make a difference.”