Obama takes stand on debt at press conference

President says US is closer to reducing deficit to goal of $4 trillion, and not raising debt ceiling would be "absurd".

    Obama takes stand on debt at press conference
    President says US will be unable to reduce deficit through spending cuts alone [Reuters]

    President Barack Obama has spoken about raising the US borrowing limit at a surprise news conference at the White House.

    The US economy is "poised for a good year as long as Washington politics don't interfere", said Obama on Monday in a speech that focused on looming budget and borrowing due dates.

    Obama said Congress' failure to raise the government's borrowing authority would delay payments of benefits to veterans and Social Security recipients.

    He again warned that he will not negotiate on raising the debt ceiling, aiming to pin the burden of an unprecedented default on Republicans.

    The government has hit its $16.4 trillion borrowing limit and is expected to run out of ways to meet all of its obligations around March 1, perhaps earlier. Republicans wants spending cuts in exchange for raising the debt ceiling.

    Threatening to not raise the debt ceiling, Obama said, would be "absurd".

    Federal Reserve Chairman Ben Bernanke also urged US lawmakers to lift the country's borrowing limit to avoid a potentially disastrous debt default.

    "It's very, very important that Congress takes the necessary action to raise the debt ceiling to avoid a situation where our government doesn't pay its bills," Bernanke told an event sponsored by the University of Michigan.

    Without an increase, the government would not have enough money to pay interest to debt holders and pay for all government programmes.

    The United States expects to run out of tools to avoid a default between mid-February and early March, potentially causing lasting damage to the US economy and its creditworthiness, the Treasury said on Monday.

    "It must be understood that the nation's creditworthiness is not a bargaining chip or a hostage that can be taken to advance any political agenda," Treasury Secretary Timothy Geithner said in a letter sent to top congressional leaders.

    Fresh off negotiating a resolution to the so-called fiscal cliff, new political confrontations loom over budget and borrowing.

    Republicans have said they will insist on spending cuts in exchange for raising the debt limit, but the president has declined to negotiate over the increase.

    In addition to the debt ceiling, Washington faces tough deadlines around the end of next month over harsh across-the-board spending cuts that would kick in unless Congress acts and the end of a stopgap government spending bill.

    Pushing gun control

    The president also said he will soon ask Congress to enact new gun legislation after the shootings a month ago that left 20 elementary students dead in Newtown, Connecticut.

    Facing stiff opposition from the National Rifle Association, he conceded legislators may not approve everything he wants.

    Obama said he would support a ban on assault weapons as part of a "sensible" effort to reduce gun violence, while saying he could take smaller steps by executive order.

    He said he supported restricting high-capacity magazines and better background checks for gun buyers but acknowledged that some proposals may fail to pass in Congress.

    "If there is a step that we can take that will save even one child from what happened in Newtown, we should take that step," said Obama.

    "The belief that we have to have stronger background checks, that we can do a much better job in terms of keeping these magazine clips with high capacity out of the hands of folks who shouldn't have them, an assault weapons ban that is meaningful... those are things I continue to believe make sense.

    "Will all of them get through this Congress? I don't know. But what's uppermost in my mind is making sure I'm honest with the American people and with members of Congress about what I think will work," said the president.

    SOURCE: Agencies


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