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China Daily Website

Obama vows not to budge on debt ceiling

Updated: 2012-12-06 10:34
( Xinhua)

WASHINGTON - US President Barack Obama warned Republicans on Wednesday that he would not engage in another debt ceiling battle and said a "fiscal cliff" deal could be possible within a week if Republicans would compromise on tax rates.

"I want to send a very clear message to people here: We are not going to play that game next year," said Obama while addressing the Business Roundtable group of chief executives.

"If Congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation -- which, by the way, we had never done in our history until we did it last year -- I will not play that game. Because we've got to break that habit before it starts," he added.

A deadlock between the White House and Republican lawmakers in 2011 brought the country to the verge of default on its debt and resulted in a downgrade in sovereign rating for the United States.

Obama said the thinking that Republicans would have more leverage next year to extract concessions with a stronger hand on the debt ceiling is a "bad strategy" for the country.

At the end of this year or early next year, the United States will be confronted with another fiscal challenge of raising its public debt limit again. The Treasury borrowing is roughly $200 billion below the 16.4-trillion-dollar statutory ceiling.

Obama also predicted that a fiscal deal could be reached in a week if his opponents compromise on taxes.

"We've seen some movement over the last several days among some Republicans. I think there's a recognition that maybe they can accept some rate increases as long as it's combined with serious entitlement reform and additional spending cuts," he said.

"If we can get the leadership on the Republican side to take that framework, to acknowledge that reality, then the numbers actually aren't that far apart. Another way of putting this is we can probably solve this in about a week; it's not that tough. But we need that conceptual breakthrough that says we need to do a balanced plan."

The White House wants an agreement to raise the debt ceiling to be part of a deal to avert the "fiscal cliff", a combination of spending cuts and tax hikes that set to take effect on Jan 1, 2013.

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