Obama has indicated on several occasions that he intends to do more to stand up to Republican tactics than during the first term. He repeated his determination not to give in to Republicans playing politics with the debt ceiling, which would further harm economic recovery, in his opening remarks at today’s press conference:
These are bills that have already been racked up, and we need to pay them. So while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.
If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans’ benefits will be delayed. 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 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. It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession, and ironically, would probably increase our deficit.
So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. As the speaker said two years ago, it would be — and I’m quoting Speaker Boehner now — “a financial disaster not only for us but for the worldwide economy.” So we got to pay our bills. And Republicans in Congress have two choices here: They can act responsibly and pay America’s bills or they can act irresponsibly and put America through another economic crisis.
But they will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.
And they’d better choose quickly because time is running short. The last time Republicans in Congress even flirted with this idea, our triple-A credit rating was downgraded for the first time in our history, our businesses created the fewest jobs of any month in nearly the past three years, and ironically, the whole fiasco actually added to the deficit.
So it shouldn’t be surprising, given all this talk, that the American people think Washington is hurting rather than helping the country at the moment. They see their representatives consumed with partisan brinksmanship over paying our bills while they overwhelmingly want us to focus on growing the economy and creating more jobs.
So let’s finish this debate. Let’s give our businesses and the world the certainty that our economy and our reputation are still second to none. We pay our bills, we handle our business, and then we can move on because America has a lot to do. We’ve got to create more jobs. We’ve got to boost the wages of those who have work. And we’ve got to reach for energy independence. We’ve got to reform our immigration system. We’ve got to give our children the best education possible, and we’ve got to do everything we can to protect them from the horrors of gun violence. And let me say I’m grateful to Vice — Vice President Biden for his work on this issue of gun violence and for his proposals, which I’m going to be reviewing today and I will address in the next few days, and I intend to vigorously pursue.
Obama is right. You cannot negotiate with terrorists. As Jonathan Chait put it, Obama Dares GOP To Kill The Hostage. Chait also wrote:
Many of us have questioned whether Obama will actually follow through on his stated intention. In these games of chicken, he always seems ready to swerve at the last moment. What’s different here is that Obama seems so determined and explicit not to pay a ransom that he is leaving himself no room to backslide. If he pays the ransom, he’ll leave himself humiliated and exposed in a way he never has.
So the two years Obama and Boehner have spent trying to deflect, delay, and placate the mania of the tea party seem to have finally come to an end point.
While answering questions, Obama also ruled out giving into Republicans demands for spending cuts which would wind up cutting Medicare and Medicaid to reduce the deficit:
I keep in mind that, you know, what we’ve heard from some Republicans in both the House and the Senate is that they will only increase the debt ceiling by the amount of spending cuts that they’re able to push through. And in order to replace the automatic spending cut, the sequester, that’s $1.2 trillion. Say it takes another trillion (dollars) or trillion two to get us through one more year. They’d have to identify $2.5 trillion in cuts just to get the debt ceiling extended to next year — 2.5 trillion (dollars).
They can’t even — Congress has not been able to identify $1.2 trillion in cuts that they’re happy with, because these same Republicans say they don’t want to cut defense. They claim that they don’t want to gut Medicare or harm the vulnerable, but the truth of the matter is, is that you can’t meet their own criteria without drastically cutting Medicare or having an impact on Medicaid or affecting our defense spending. So the math just doesn’t add up.
Now, what — here’s what would work. What would work would be for us to say, we’ve already done close to $2 trillion in deficit reduction, and if you add the interest that we won’t be paying because of less spending and increased revenue, it adds up to about $2.5 trillion.
The consensus is we need about $4 trillion to stabilize our debt and our deficit, which means we need about $1.5 trillion more. The package that I offered to Speaker Boehner before we — before the new year would achieve that. We were actually fairly close in terms of arriving at that number.
So — so if the goal is to make sure that we are being responsible about our debt and our deficit, if that’s the conversation we’re having, I’m happy to have that conversation. And by closing some additional loopholes through tax reform — which Speaker Boehner has acknowledged can raise money in a sensible way — and by doing some additional cuts, including making sure that we are reducing our health care spending, which is the main driver of our deficits, we can arrive at a package to get this thing done. I’m happy to have that conversation.
What I will not do is to have that negotiation with a gun at the head of the American people; the threat that unless we get our way, unless you gut Medicare or Medicaid or, you know, otherwise slash things that the American people don’t believe should be slashed, that we’re going to threaten to wreck the entire economy. That is not how historically this has been done. That’s not how we’re going to do it this time.
He repeated this defense of Social Security and Medicare later in the press conference.