President Obama warned congressional leaders on Wednesday that he would not tolerate a replay of the bitter debt-ceiling fight of last summer that nearly put the United States in default and led to the nation’s first credit-rating downgrade.
During lunch at the White House with top leaders of the House and Senate, Obama called the political deadlock last year “not acceptable” and emphasized that he expects a “serious bipartisan approach” to tackling the budget and the federal deficit this year, White House press secretary Jay Carney said.
House Speaker John Boehner renewed his demand for big spending cuts before the debt limit is raised again at year's end.
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“We must define the nature and scope of this struggle, or else it will define us,” the president said.
Obama stressed the need to “avoid fighting old political fights,” Carney told reporters after the meeting. “It’s simply not acceptable to hold the American and global economy hostage to one party’s political ideology. It’s the responsibility of Congress to ensure that the United States of America pays its bills, maintains its creditworthiness.”
The president’s warning came a day after House Speaker John A. Boehner (R-Ohio) threatened again to block an increase in the federal debt ceiling by early next year — when the debt is expected to reach its $16.4 trillion limit — without significant new cuts in spending.
Boehner’s office said Wednesday that the speaker told Obama that he would not allow “a debt-ceiling increase without doing something serious about the debt.”
Senate Majority Leader Harry M. Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader Nancy Pelosi (D-Calif.) also attended the meeting.
Republicans agreed last summer to raise the debt ceiling only after Obama dropped demands to include new revenue in a deficit-reduction package. That debt-limit agreement came with about $1 trillion in immediate spending cuts, and a round of $1.2 trillion in mandatory reductions that Congress put off until January.
The dispute led the Wall Street credit rating firm Standard & Poor’s to downgrade the U.S. bond rating from AAA to AA+.
The debt limit isn’t the only fiscal policy that lawmakers will tackle shortly after the November elections. Also in January, the president and Congress will face the expiration of a host of tax cuts that benefit every American household.
Unless Congress agrees on an alternative deficit-reduction strategy, the policies threaten to deliver a fiscal shock that could throw the nation back into a recession.
Carney blamed Republican “intransigence” for threatening to derail the economy, stressing that the White House expects Congress to pursue a “balanced approach” to deficit reduction that includes a mix of spending cuts and tax increases on the wealthy.
During the lunch meeting, Obama also urged Congress to support a handful of proposals aimed at boosting small businesses and allowing homeowners to refinance at lower interest rates.