At his final White House press conference of his first term in office, President Obama made clear that the government has no workaround to avoid the consequences of House Republicans failing to raise the debt limit, and in so doing made it clear that a lapse in borrowing authority will result in deep cuts to popular government programs and services, for which the GOP will bear responsibility.
“If Congressional Republicans refuse to pay America’s bills on time, Social Security checks, veterans benefits will be delayed,” Obama warned. “We might not be able to pay our troops or honor our contracts with small-business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear materials would not 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 anyone who borrowed money.”
The specter of an enormous wave of missed payments to powerful stakeholders — and possibly a default on the debt — will, the Obama administration believes, create enormous pressure on House Republicans to drop their demands and raise the debt limit cleanly, or in an uncontroversial way.
But that risk only exists if the White House lacks plausible, less economically harmful alternatives, such as continuing to issue new debt in defiance of the law, or minting currency to pay obligations without issuing new debt — two options the administration has explicitly rejected.
“There is no simpler solution, no ready, credible solution other than Congress either [to] give me the authority to raise the debt ceiling or exercise the responsibility that they have kept for themselves and raise the debt ceiling,” Obama said.
In the wake of the administration’s declaration that it won’t take unprecedented steps to meet all of its obligations in the event of a debt limit breach, Republican leaders are shifting the threat — hoping to pick a fight over funding the federal government at the end of March, rather than over the debt limit itself. But increasing the debt limit without requiring Democrats to accept spending cut concessions will put a weakened House Speaker John Boehner (R-OH) in the difficult position of finding enough Republican votes in order to pass a debt limit bill cleanly, with the help of Democrats.
As Obama noted during his press conference, a lot of Republicans will abandon Boehner. But he wants the GOP to reckon with their internal problems anyhow.
“It seems as though what is motivating this from the House Republicans is more than debt reduction. They have a vision about what government should and should not do. They are suspicious about government policy commitments to make sure that seniors have decent health care as they grow older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research. They have a particular view about what government should do and should be. That deal was rejected by the American people when it was debated during the presidential campaign.”
