Obama hammers Republicans on debt deal
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WASHINGTON - President Barack Obama Wednesday bluntly warned Republicans must cave in and accept tax hikes for the rich in a deal to head off a debt default that would deal a "significant" blow to the economy.
In a populist, blunt and sarcastic swipe at his foes, Obama dismissed criticism that his own leadership was lacking, in a showdown over raising the government's $14.29 trillion borrowing authority ahead of an August 2 deadline.
He said his Democrats had accepted tough and painful spending cuts but lashed out at Republicans who he said were blocking his spending on education and health care to save tax breaks for oil firms and corporate jet owners.
"I don't think that's real radical. I think the majority of Americans agree with that," Obama said, in a combative White House press conference.
Republicans, who are demanding deep spending cuts in exchange for voting in Congress to raise the debt ceiling, last week walked out of talks with the administration, claiming Obama is bent on raising taxes.
But Obama somberly warned that should a deal not get done soon, the United States faced the real prospect of defaulting on its debts at a time when it is already struggling to fire up a sluggish recovery and create jobs.
"If the United States government for the first time cannot pay its bills, if it defaults, then the consequences for the US economy will be significant and unpredictable and that is not a good thing," Obama said.
Though saying he did not want to "spook" people, Obama warned no one knew how capital markets and investors in the US economy would react if no deal was reached, and said the economic headwinds America was facing would get worse.
"These are bills that Congress ran up. The money's been spent," Obama said, comparing lawmakers to a family that had bought a car or a house and was refusing to pay its bills.
"We're the greatest nation on Earth and we can't act that way. This is urgent and needs to get settled."
In another highly sarcastic swipe, Obama even compared his Republican foes unfavorably to his daughters Malia and Sasha who he said always got their homework done well before it was due.
"They don't wait until the night before. They're not pulling all-nighters. Congress can do the same thing. I'm very amused when I start hearing comments about, well, the president needs to show more leadership on this."
The comments, which were incendiary and highly political in tone, came as the debt showdown gets caught up in Obama's campaign for a second White House term and Republican efforts to thwart him.
Opinion polls have found that the US public broadly backs raising taxes on the wealthiest Americans as part of a comprehensive agreement to reduce the soaring deficit and rein in galloping debt.
"The revenue we're talking about isn't coming out of the pockets of middle-class families that are struggling; it's coming out of folks who are doing extraordinarily well and who are enjoying the lowest tax rates since before I was born," the president said.
Despite his sarcasm however, Obama, who has now taken charge of negotiations with Republicans, predicted a deal would emerge eventually.
In the United States, Congress has to agree to lifting the cap on government borrowing, and has done so repeatedly in recent years at the urging of successive Democratic and Republican presidents.
But this time, congressional Republicans elected in a backlash against government and on a platform of sweeping spending cuts in last November's mid-term polls, are demanding big concessions from the White House.
Obama's press conference in the ornate East Room of the White House was dominated by the economy but the president also defiantly defended his positions on Libya and Afghanistan.
He insisted that US participation in NATO military strikes on Libya remained limited and legal, accusing congressional critics who have questioned his authority to carry on the mission of making a "fuss" for political reasons.
"We have not seen a single US casualty. There's no risks of additional escalation," the president said.
"This operation is limited in time and in scope. So I said to the American people, here's our narrow mission and we carried out that narrow mission in exemplary fashion," Obama said.
And he said that Afghanistan's forces were improving, despite the brazen attack by Taliban militants on the Intercontinental hotel in Kabul on Tuesday which killed 21 people including the assailants.
But though Kabul is "much safer than it was" Obama expected such attacks to continue for some time.