President Barack Obama speaks during his final news conference of his first term in the East Room of the White House in Washington, Monday, Jan. 14, 2013. (AP Photo/Carolyn Kaster)
Updated: February 16, 2013 6:24AM
WASHINGTON — Declaring “we are not a deadbeat nation,” President Obama warned on Monday that Social Security checks and veterans’ benefits will be delayed if congressional Republicans fail to increase the government’s borrowing authority in a looming showdown over the nation’s debt and spending.
Obama said he was willing to negotiate deficit reduction with GOP leaders but insisted that those talks be separate from decisions to raise the $16.4 trillion debt ceiling and avert a possible first-ever national default.
“They will not collect a ransom in exchange for not crashing the American economy,” Obama said in a news conference one week before he is sworn in for a second term. “What I will not do is to have that negotiation with a gun at the head of the American people.”
Bitter brinkmanship between the White House and congressional Republicans over spending has become a defining event over the past four years, testing both Obama’s leverage and his resolve at different moments of his presidency. House Speaker John Boehner brushed off Obama’s insistence on separating the debt ceiling from negotiations over spending cuts.
“The American people do not support raising the debt ceiling without reducing government spending at the same time,” Boehner said. “The consequences of failing to increase the debt ceiling are real, but so, too, are the consequences of allowing our spending problem to go unresolved.
Underscoring the urgency, Treasury Secretary Timothy Geithner said in a letter to Boehner on Monday that the government will exhaust its borrowing limit as soon as mid-February, earlier than expected. The Treasury has been using bookkeeping maneuvers to keep from surpassing the debt ceiling, but Geithner said those measures will be exhausted by mid-February to early March.
In addition to noting possible effects on older Americans and veterans, Obama recited a litany of possible consequences if Congress fails to raise the debt ceiling, including sending the economy back into recession.
At this moment, the government faces three looming deadlines: The debt limit must be raised soon to meet spending obligations and prevent a first-ever default, a series of across-the-board spending cuts is to kick in on March 1, and funding for most government programs will run out on March 27.
After Obama won tax rate increases for wealthier Americans during budget negotiations last month, Republicans became doubly determined to win spending cuts. They see the confluence of events ahead of April 1 as their best opportunity.
Boehner has made it clear that he’s eager to avoid a first-ever default on U.S. obligations — even if some Republicans aren’t afraid of the idea.
In one sign of flexibility, a Boehner spokesman says that though there is the so-called Boehner Rule requiring $1 in spending cuts for every $1 in increased authority to issue government debt, the speaker is willing to apply it more leniently to include savings from “reforms” to entitlement programs like Medicare and Social Security that accrue over the long term.