WASHINGTON — Declaring “we are not a deadbeat nation,” President Barack Obama warned 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.
“They will not collect a ransom in exchange for not crashing the American economy,” Obama said. “What I will not do is to have that negotiation with a gun at the head of the American people.”
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 Monday in a letter to Boehner 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 soon be exhausted.
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.
“We might not be able to pay our troops, or honor our contracts with small business owners ,” he 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.”