Barack Obama digs heels in, refuses to negotiate debt ceiling
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President Barack Obama on Monday rejected any negotiations with Republicans over raising the nation's borrowing limit, accusing his opponents of trying to extract a ransom for not ruining the U.S. economy in the latest fiscal fight.
Calling a White House news conference to promote his position on the budget, Obama vowed not to trade cuts in government spending sought by Republicans in exchange for raising the borrowing limit.
"What I will not do is to have that negotiation with a gun at the head of the American people," he said.
With an agreement to prevent the "fiscal cliff" barely two weeks old, Washington has already begun skirmishing over a new fiscal issue: the debt ceiling, which fixes a limit on how much the government can borrow.
The United States could default on its debt if Congress does not increase the borrowing limit. Obama has tangled repeatedly with Congress over budget and spending issues, and on Monday he said Republicans would bear the responsibility for the consequences of a default.
"They can act responsibly, and pay America's bills or they can act irresponsibly, and put America through another economic crisis," he said. "But they will not collect a ransom in exchange for not crashing the American economy."
Republicans want Obama to cut some government spending to rein in the deficit before they agree to raise the debt limit again.
Obama must get "serious about spending and the debt limit is the perfect time for it," Senate Republican leader Mitch McConnell said. "The American people do not support raising the debt ceiling without reducing government spending at the same time," said Republican John Boehner, the House of Representatives speaker.
The last debt ceiling fight, in 2011, upset world financial markets. Obama cast the borrowing issue on Monday as one that will affect many Americans and sensitive industries.