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Obama: Raise the Debt Ceiling Or We're in Trouble

President Barack Obama says the U.S. economy risks a “very deep recession” if Congress doesn’t raise the debt ceiling.
By Elad Benari
First Publish: 10/9/2013, 12:15 AM

President Barack Obama
President Barack Obama
Flash 90

President Barack Obama said on Tuesday that the U.S. economy risks a “very deep recession” if Congress doesn’t raise the $16.7 trillion debt ceiling.

Speaking at a news conference at the White House, Obama said he’s willing to talk to Republicans about anything, including changes to his health-care law, once lawmakers end the partial government shutdown and increase the country’s borrowing authority.

“No American president would deal with a foreign leader like this,” he said, according to Bloomberg News. “Most of you would not deal with either coworkers or business associates in this fashion. We shouldn’t be dealing this way here in Washington.”

Obama spoke as lawmakers in Congress began taking the first tentative steps toward resolving the standoff. Both sides are exploring actions that will be needed to end the week-old shutdown and raise the debt limit before U.S. borrowing authority lapses on October 17.

Obama did not answer directly when asked whether he planned to make sure bondholders get paid first. He said there would be consequences for the economy and the creditworthiness of the U.S. if the government missed other payments such as those to Social Security beneficiaries.

If an individual doesn’t make required payments, the president said, “You’re just a deadbeat and you can anticipate that will hurt your credit.”

Obama also expressed openness to short-term measures for funding the government or raising the debt ceiling as long as policy conditions aren’t attached.

Senate Democrats are expected to introduce a bill on Tuesday that would raise the debt ceiling for a year, said Senator Charles Schumer, a New York Democrat. They are planning a test vote before the end of this week.

To succeed, they’ll need support from at least six Republicans on procedural votes. They’ve gotten backing from one Republican, while several others haven’t ruled out the possibility, reported Bloomberg.

The partial shutdown, which began October 1, has shuttered government services such as Head Start preschool programs and national parks and furloughed federal employees. Other functions, such as mail delivery and Social Security benefits, are continuing.

Republicans are insisting on changing the 2010 Affordable Care Act, while Obama refuses to engage in discussions about tying policy conditions to opening the government or raising the debt limit.

The U.S. will run out of borrowing authority on October 17 and will have about $30 billion in cash after that. The country would be unable to pay all of its bills, including benefits, salaries and interest, sometime between October 22 and October 31, according to the Congressional Budget Office.