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Obama: Rare chance to stabilize fragile economy while raising critical national debt limit
WASHINGTON (AP) ' President Barack Obama said Friday Congress has a "unique opportunity to do something big" and stabilize the U.S. economy for decades by cutting deficits at the same time it raises the national debt limit ahead of a critical Aug. 2 deadline.
He warned starkly that failure would mean "effectively a tax increase for everybody" if the government defaults, sending up interest rates.
Still, Obama said that "it's hard to do a big package" in deadlocked Washington, acknowledging Republicans are opposed to any new tax revenue as part of a deficit-cutting deal.
"If they show me a serious plan I'm ready to move," he said.
The president spoke at the White House Friday after five days straight of meetings with congressional leaders failed to yield compromise, and amid increasingly urgent warnings from credit agencies and the financial sector about the risks of failing to raise the government's borrowing limit.
Administration officials and private economists say that if the U.S. fails to raise its borrowing limit and begins to stop paying its bills as a result, the fragile U.S. economy could be cast into a crisis that would reverberate around the globe. Democratic and Republican congressional leaders agree on the need to avert that outcome, but that hasn't been enough to get Republicans to agree to the tax hikes on corporations and the wealthy sought by Obama ' or to convince Obama and Democrats to sign onto the steep entitlement cuts without new revenue that Republicans favor.
The president spoke at his third news conference in two weeks on an issue that is increasingly consuming Washington and his presidency.