President Obama held this press conference at the White House on January 14, 2013, to discuss the debt ceiling.
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Excerpt from the transcript:
"QUESTION: Thank you, sir. As you know, Senate Democrats -- Harry Reid sent you a letter begging you, essentially, to take -- consider some sort of executive action on this debt ceiling issue. I know you've said you're not negotiating on it. Your administration has ruled out the various ideas that have been out there, the 14th Amendment, but just this morning, House -- one of the House Democratic leaders, Jim Clyburn, asked you to use the 14th Amendment and even said sometimes that's what it takes. He brought up the Emancipation Proclamation as saying they took executive action when Congress wouldn't act, and he compared the debt ceiling to that. So are you considering a Plan B? And if not, why not?
OBAMA: Well, Chuck, the issue here is whether or not America pays its bills. We are not a deadbeat nation. And so there's a very simple solution to this: Congress authorizes us to pay our bills. Now, if the House and the Senate want to give me the authority so that they don't have to take these tough votes, if they want to put the responsibility on me to raise the debt ceiling, I'm happy to take it. Mitch McConnell, the Republican leader in the Senate, had a proposal like that last year. And I'm happy to accept it.
But if they want to keep this responsibility, then they need to go ahead and get it done. And, you know, there are no magic tricks here. There are no loopholes. There are no, you know, easy outs. This is a matter of Congress authorizes spending. They order me to spend. They tell me, you need to fund our Defense Department at such- and-such a level, you need to send out Social Security checks, you need to make sure that you are paying to care for our veterans. They lay all this out for me, and -- because they have the spending power. And so I am required by law to go ahead and pay these bills.
Separately, they also have to authorize a raising of the debt ceiling in order to make sure that those bills are paid. And so what Congress can't do is tell me to spend X and then say, "But we're not going to give you the authority to go ahead and pay the bills."
And I just want to repeat, because I think sometimes the American people understandably aren't following all -- all the debates here in Washington. Raising the debt ceiling does not authorize us to spend more. All it does is say, that America will pay its bills. And we are not a deadbeat nation.
</fb:like></span><span id=check-twitter> And the consequences of us not paying our bills, as I outlined in my opening statement, would be disastrous. So, I understand the impulse to try to get around this in a simple way. But there's one way to get around this. There's one way to deal with it, and that is for Congress to authorize me to pay for those items of spending that they have already authorized. And the -- you know the -- the notion that Republicans in -- in the House, or maybe some Republicans in the Senate would suggest that in order for us to get our way on our spending priorities, that we would risk the full faith and credit of the United States, that I think is not what the founders intended.
That's now how I think most Americans think our democracy should work. You know they've got a point of view. Democrats in Congress have a point of view. They need to sit down, and -- and work out a compromise.
QUESTION: (Inaudible) If you're not negotiating, and they say you have to negotiate (inaudible) considering other Plan B? You do see (inaudible)?
OBAMA: Well, look, Chuck, there -- there are -- there -- there's a pretty straightforward way of doing this, and that is to set the debt ceiling aside, we pay our bills. And then we have a vigorous debate about how we're gonna do further deficit reduction in a balanced way.
Now, keep in mind that, you know, what we've heard from some republicans, in both the House and the Senate, is that they will only increase the debt ceiling by the amount of spending cuts that they're able to push through. And, in order to replace the automatic spending cuts, the sequester, that's $1.2 trillion. Say it takes another $1 trillion or $1.2 trillion to get us through one more year, they'd have to identify $2.5 trillion in cuts just to get the debt ceiling extended to next year, $2.5 trillion.
They can't even -- Congress has not been able to identify $1.2 trillion in cuts that they're happy with, because these same republicans say they don't want to cut defense. They've claimed that they don't want to gut Medicare or harm the vulnerable, but the truth of the matter is, is that you can't meet their own criteria without drastically cutting Medicare, or having an impact on Medicaid, or affecting our defense spending. So the math just doesn't add up.
Now, what -- here -- here's what would work. What would work would be for us to say, we've already done close to $2 trillion in deficit reduction, and if you add the interest that we won't be paying, because of less spending and increased revenue, it adds up to about $2.5 trillion.
OBAMA: The consensus is we need about $4 trillion to stabilized our debt and our deficit, which means we need about $1.5 trillion more. The package that I offered to Speaker Boehner before we -- before the new year would achieve that. We were actually fairly close in terms of arriving at that number.
So -- so, if the goal is to make sure that we are being responsible about our debt and our deficit -- if that's the conversation we're having, I'm happy to have that conversation. And by closing some additional loopholes through tax reform, which Speaker Boehner has acknowledged can raise money in a sensible way, and by doing some additional cuts, including making sure that we are reducing our health care spending, which is the main driver of our deficits, we can arrive at a package that gets this thing done.
I'm happy to have that conversation. What I will not do is to have that negotiation with a gun at the head of the American people -- the threat that unless we get our way, unless you gut Medicare or Medicaid, or, you know, otherwise slash things that the American people don't believe should be slashed, that we're going to threaten to wreck the entire economy. That is not how historically this has been done. That's not how we're going to do it this time.
QUESTION: (inaudible) not searching for (inaudible)?
OBAMA: What I'm...
OBAMA: Chuck, what I'm saying to you is that there is no simpler solution, no ready, credible solution other than Congress either give me the authority to raise the debt ceiling or exercise the responsibility that they have kept for themselves and raise the debt ceiling, because this is about paying your bills.
OBAMA: Everybody -- everybody here understands this. I mean, this is not a complicated concept. You don't go out to dinner and then, you know, eat all you want and then leave without paying the check. And if you do, you're breaking the law. And Congress is -- should think about it the same way that the American people do.
You don't -- now, if Congress wants to have a debate about maybe we shouldn't go out to dinner next time, maybe we should go to a more modest restaurant, that's fine. That's a debate that we should have. But you don't -- you don't say, in order for me to control my appetites, I'm going to not pay the people who already provided me services, people who already lent me the money. That's not -- that's not showing any discipline. All that's doing is not meeting your obligations. You can't do that.
And -- and that's not a credible way to run this government. We've got to stop lurching from crisis to crisis to crisis when there's this clear path ahead of us that simply requires some discipline, some responsibility, and some compromise. That's where we need to go. That's how this needs to work.
QUESTION: Thank you, Mr. President. As you well know, sir, finding votes for the debt ceiling can sometimes be complicated. You yourselves as a member of the Senate voted against a debt ceiling increase. And in previous aspects of American history, President Reagan in 1985, President George Herbert Walker Bush in 1990, President Clinton in 1997 all signed deficit reduction deals that were contingent upon or in the context of raising the debt ceiling. You yourself four times have done that; three times those were related to deficit reduction or budget maneuvers.
What Chuck and I and I think many people are curious about is this new adamant desire on your part not to negotiate when that seems to conflict with the entire history in the modern era of American presidents in the debt ceiling and your own history on the debt ceiling. And doesn't that suggest that we are going to go into a default situation, because no one is talking to each other about how to resolve this?
OBAMA: Well, no, Major. I think if you look at the history, getting votes for the debt ceiling is always difficult and budgets in this town are always difficult. I went through this just last year. But what's different is we never saw a situation as we saw last year in which certain groups in Congress took such an absolutist position that we came within a few days of defaulting.
And, you know, the fact of the matter is, is that we have never seen the debt ceiling used in this fashion, where the notion was, you know what, we might default unless we get 100 percent of what we want. That hasn't happened.
Now, as I indicated before, I'm happy to have a conversation about how we reduce our deficits further in a sensible way, although one thing I want to point out is that the American people are also concerned about how we grow our economy, how we put people back to work, how we make sure that we finance our workers getting properly trained and our schools are giving our kids the education we deserve. There's a whole growth agenda which will reduce our deficits that's important, as well.
OBAMA: But what you've never seen is the notion that has been presented so far at least by the Republicans that deficit reduction will only count spending cuts, that we will raise the deficit -- or the debt ceiling dollar for dollar on spending cuts. There are a whole set of rules that have been established that are impossible to meet without doing severe damage to the economy. And so what we're not going to do is put ourselves in a position where in order to pay for spending that we've already incurred, that our two options are; we're either going to profoundly hurt the economy, and hurt middle- class families, and hurt seniors, and hurt kids who are trying to go to college, or alternatively we're going to blow up the economy. We're not going to do that.
QUESTION: (Inaudible) three-month extension for this? What ever Congress sends you, you're OK with?
OBAMA: No, not whatever Congress sends me. They're going to have to send me something that's sensible. And we shouldn't be doing this...
OBAMA: ...then we should -- and we shouldn't be doing this on a one to three month time frame. Why would we do that? This is the United States of America, Major. Why -- what -- we can't manage our affairs in such a way that we pay our bills? And we provide some certainty in terms of how we pay our bills? Look I -- I don't -- I don't think anybody would consider my position unreasonable here. The -- I have...
QUESTION: (Inaudible) talk about this on a daily basis (inaudible.)
OBAMA: Major, the -- I am happy to have a conversation about how we reduce our deficits. I am not going to have a monthly, or every three months conversation about whether or not we pay our bills. Because that, in and of itself does severe damage. Even the threat of default hurts our economy. It's hurting our economy as we speak. We shouldn't be having that debate.
OBAMA: If we want to have a conversation about how to reduce our deficit, let's have that. We've been having that for the last two years. We just had an entire campaign about it. And by the way, the American people agreed with me, that we should reduce our deficits in a balanced way, that also takes into account the need for us to grow this economy, and put people back to work.
And despite that conversation, and despite the election results, the position that's been taken, on the part of some House republicans, is that, "Nope, we gotta do it our way. And if we don't, we simply won't pay America's bills."
Well, you know, that -- that can't be -- that can't be a position that is sustainable over time. It's not one that's good for the economy now. It's certainly not going to be the kind of precedent that I want to establish, not just for my presidency, but for future presidents. Even if it was on the other side.
Democrats don't like voting for the debt ceiling when a Republican's president. And yet, you -- you -- but you never saw a situation in which Democrats suggested somehow that we would go ahead and default if we didn't get 100 percent of our way. That's just not how it's supposed to work."