Obama insists on higher debt ceiling in last press conference of first term
Washington, DC, United States (4E) – U.S. President Barack Obama held the last press conference of his first term Monday, telling reporters at the White House he will not negotiate with Congressional Republicans over the raising of the debt ceiling.
Obama said Republicans can either act responsibly and pay America’s bills or act irresponsibly and put America through another economic crisis.
Obama warned that failing to raise the $16.394 trillion debt ceiling, which was reached on Dec. 31, will result in delayed payment of Social Security checks and veterans’ benefits as well as salaries of troops and bills to federal contractors and small business owners. He said this will affect markets, raise interest rates on loans and slow down economic growth.
House Speaker John Boehner responded to Obama’s remarks by saying that not solving spending problem has as much consequences as failing to increase the debt ceiling.
The Treasury Department is no longer allowed to borrow new money to pay the country’s financial obligations but is raising $200 billion using extraordinary measures. However, the legal tact is good only between middle of next month and early March.
Meanwhile, Federal Reserve Chairman Ben Bernanke said in a speech at the University of Michigan on Monday that it will be good to not have a debt ceiling but admitted that Congress will never get rid of it.
Bernanke refuted Republicans’ argument that raising the debt ceiling will open the floodgates for more spending. He said a higher debt ceiling is meant to allow the government to continue paying its bills.