On the heels of a long legislative fight over the “fiscal cliff,” President Obama made it clear Saturday that while he’s willing to debate more spending cuts and tax increases to reduce the deficit he “will not compromise” on demanding that Congress increase the federal debt ceiling. “One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up,” Obama said during his weekly radio and Internet address. “If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic.”
Obama made it clear he expects more changes in the tax code, saying that the wealthy and corporations need to pay more in taxes through the closing of loopholes, reports Bloomberg. “Spending cuts must be balanced with more reforms to our tax code,” Obama said. “The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.” He also said that while much more needs to be done to boost the U.S. economy and shrink the deficit, the nation “can’t afford more protracted showdowns or manufactured crises along the way.” But Republicans made it quite clear during their weekly address that a showdown may be inevitable because the GOP expects spending cuts in return for raising the debt ceiling, points out Reuters. (Watch both addresses after the jump.)
"Many of our Democrat colleagues just don't seem to get it. Throughout the fiscal cliff discussions, the president and the Democrats who control Washington repeatedly refused to take any meaningful steps to make Washington live within its means," Rep. Dave Camp said. "As we turn our attention toward future discussions on the debt limit and the budget, we must identify responsible ways to tackle Washington's wasteful spending."
The United States reached its $16.4 trillion legal debt limit at the end of 2012, and for now the Treasury Department has been using extraordinary measures to finance the government. “If Congress fails to lift the ceiling, a cash management crisis will result, as the Treasury will lack the money to pay all the country’s bills on time,” explains the New York Times.