Economy

President Obama willing to negotiate if debt ceiling, CR resolutions are passed

Barack Obama

Barack Obama

President Obama said during a press conference on Tuesday that if Republicans in Congress pass interim debt ceiling and continuing resolution measures, he would be willing to negotiate on healthcare, spending and the deficit.

“I mean, what I’ve said is that I will talk about anything,” Obama said. “What will happen is we won’t agree on everything.  I mean, the truth is, is that the parties are pretty divided on a whole bunch of big issues right now.  Everybody understands that… The only thing that our democracy can’t afford is a situation where one side says, unless I get my way, and only my way, unless I get concessions before we even start having a serious give-and-take, I’ll threaten to shut down the government or I will threaten to not pay America’s bills.”

When asked about whether the administration would pay bondholders first or benefits to Social Security recipients and service members in the event of default, Obama said he will continue “to be very hopeful that Congress does not put [the country] in that position.”

“I do know that there have been some who have said that if we just pay bondholders, if we just pay people who have bought Treasury bills that we really won’t be in default because those interest payments will be made,” Obama said. “And to them, what I have to remind them is we’ve got a lot of other obligations, not just people who pay Treasury bills. We’ve got senior citizens who are counting on their Social Security check arriving on time. We have veterans who are disabled who are counting on their benefits. We have companies who are doing business for our government and for our military that have payrolls that they have to meet, and if they do not get paid on time, they may have to lay off workers. All those folks are potentially affected if we are not able to pay all of our bills on time.”

Additionally, Obama said the government may “run out” of emergency powers and be unable to mitigate the consequences of national default.

“I know there’s been some discussion, for example, about my powers under the 14th Amendment to go ahead and ignore the debt ceiling law,” Obama said. “Setting aside the legal analysis, what matters is, is that if you start having a situation in which there’s legal controversy about the U.S. Treasury’s authority to issue debt, the damage will have been done even if that were constitutional, because people wouldn’t be sure. It would be tied up in litigation for a long time. That’s going to make people nervous.”

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