“That’s not the way our government works.”
Obama, who spoke to Boehner earlier by phone, argues that raising the debt ceiling is vital to America’s most valuable asset, its creditworthiness, which should not be prey to political uncertainty.
Boehner counters that presidents have always bargained with lawmakers over raising the debt ceiling, and is unwilling to give up an area of prime political leverage.
If the $16.7 trillion debt ceiling is not raised by October 17, the United States will be unable to borrow more money and will begin defaulting on its obligations, in a scenario that could tip the economy back into recession and trigger global chaos.
The president said that a default would be, in the words of economists he quoted, “insane, catastrophic, chaos.”
Asked what the government would do if the debt ceiling were not increased on time and the government would have to decide which bills not to pay, Obama said the issue was still being reviewed.
“No option is good in that scenario,” he said. “We are exploring all contingencies.”
Obama did signal some flexibility, saying he was open to negotiating with Republicans on budget issues even if lawmakers extended borrowing and reopened the government only on a short-term basis.
“If they can’t do it for a long time, do it for the period of time in which these negotiations are taking place,” he said.
Republicans proposed a bipartisan committee to discuss how to get out of the budget impasse and the debt ceiling row. The House passed a bill setting up the working group late Tuesday.
But Obama dismissed the move as a ruse to discuss spending cuts that only Republicans want, and vowed to veto such a solution in the unlikely event it reaches his desk.
With both sides locked in stalemate, Senate Majority Leader Harry Reid introduced legislation late Tuesday that would raise the debt ceiling through the end of 2014 “with no preconditions or strings attached.”
“I hope we can get Republican cooperation to move this bill quickly,” he said. “If not, the process could take us dangerously close to economic chaos.”
The democratic leader noted earlier that, if all procedural blocking tactics were used, the bill would go up for a final Senate vote on October 16.
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