WASHINGTON — President Obama warned Republicans on Monday against refusing to raise the nation’s debt ceiling, calling such talk ‘‘irresponsible’’ and ‘‘absurd’’ and saying it would cause an economic crisis and financial hardship for millions of Americans.
‘‘They will not collect a ransom in exchange for not crashing the American economy,’’ Obama said during his final news conference of his first term. ‘‘The full faith and credit of the United States of America is not a bargaining chip.’’
The president repeated his vow to seek what he called a balanced approach to reduce the nation’s deficit during the months ahead. But he said he would not negotiate on the debt ceiling, and he said that Republicans in Congress would be responsible for the effects of a refusal to raise it. ‘‘It would be a self-inflicted wound on the economy,’’ Obama said. ‘‘It would slow down our growth and tip us into recession. To even entertain the idea of this happening is irresponsible. It’s absurd.’’
“America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up,’’ he added.
Obama said Social Security checks and veterans’ benefits will be delayed if Congress fails to increase the borrowing authority. He 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.
takes hard line with Congress
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.’’
‘‘Without meaningful action, the debt will continue to act as an anchor on our economy, costing American jobs and endangering our children’s future,’’ Boehner added. “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.’’
Senate Republican leader Mitch McConnell of Kentucky said Obama and his allies in Congress need to get serious about spending, and that the debt-limit debate is the perfect time for it.
Treasury Secretary Timothy Geithner said in a letter to Boehner on Monday that the government will reach 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 listed other possible consequences of a default.
‘‘We might not be able to pay our troops, or honor our contracts with small business owners,’’ Obama said. ‘‘Food inspectors, air traffic controllers, specialists who track down loose nuclear materials wouldn’t get their paychecks.
“Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money, every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire.’’
Six days before he is to be inaugurated again, Obama is preparing a rapid-fire agenda for the early days of his second term. In addition to negotiations over the debt limit, Obama is preparing for a difficult debate over spending cuts and has said he will propose a comprehensive overhaul of the nation’s immigration system.
After Obama won tax rate increases for wealthier Americans during budget negotiations last month, Republicans became doubly determined to win spending reductions.
They see the confluence of events ahead of April 1 as their best opportunity. In addition to the debt ceiling deadline, the nation faces a series of across-the-board spending cuts that are scheduled to kick in on March 1.
‘‘We can’t manage our affairs in such a way that we pay our bills and we provide some certainty in the way we pay our bills?’’ Obama said Monday with a tone of exasperation. ‘‘I don’t think anyone would consider my position unreasonable here.’’
Obama has said he will not be forced into negotiations that put the nation’s credit at risk, as it was in mid-2011, when brinkmanship damaged the economy and led one rating firm to downgrade the nation’s credit rating.
The president said he hoped that common sense would prevail but said Republicans would be responsible for the consequences if a default occurs.
“If the Republicans in Congress have made a decision that they want to shut down the government in order to get their way, then they have the votes, at least in the House, to do that,’’ he said.