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Obama, Boehner Spar Over Debt Limit

January 18, 2013—In the last press conference of his first term, President Obama Jan. 14 reiterated that he will not negotiate over the debt ceiling.  The president said, “[W]hile I am willing to compromise and find common ground over how to reduce deficits, America cannot afford another debate with the Congress about whether or not they should pay the bills they have already racked up.”

The president warned that a failure to raise the debt ceiling “would be a self-inflicted wound on the economy. It would slow our growth, might tip us into recession, and ironically, would probably increase our deficit.”

Saying congressional Republicans “will not collect a ransom in exchange for not crashing the American economy," the president added, "The full faith and credit of the United States of America is not a bargaining chip.”

In a Jan. 14 response, House Speaker John Boehner (R-Ohio) said, “The American people do not support raising the debt ceiling without reducing government spending at the same time.... The House will do its job and pass responsible legislation that controls spending, meets our nation's obligations and keeps the government running, and we will insist that the Democratic majority in Washington do the same.”  Boehner repeatedly has said that any increase in the debt ceiling must be equaled or exceeded by spending cuts.

In a Jan. 14 letter to Congress, Treasury Secretary Timothy Geithner said that the federal government will exhaust the extraordinary measures it is taking to avoid default “between mid-February and early March.”  He added that any estimate of when this will occur “will be subject to a significant amount of uncertainty because we are entering tax filing season, when the amounts and timing of tax payments and refunds are unpredictable.”

Meanwhile, acting Office of Management and Budget (OMB) Director Jeffrey Zients Jan. 14 instructed federal agencies “to continue to prepare for the possibility that they will need to operate with reduced budgetary resources.”  The memo notes, “While agency plans should reflect intensified efforts to prepare for operations under a potential sequestration, actions that would implement reductions… as a response to sequestration should generally not be taken at this time.”

Additionally, House Ways and Means Committee Chair Dave Camp (R-Mich.) Jan. 15 announced a Jan 22 full committee hearing to “examine the history of the debt limit, how past Congresses and Presidents have negotiated and raised the limit, and whether the Constitution provides options to the Executive Branch when the debt limit is reached.”


Dave Moore
Senior Director, Government Relations
Telephone: 202-828-0559


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Jason Kleinman
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Telephone: 202-903-0806