US President Barack Obama takes part in a news conference
in the East Room of the White House in Washington.
President Barack Obama has rejected any negotiation with
Republicans over the most pressing US fiscal issue, refusing to
trade cuts in government spending in exchange for raising the
"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," Obama
said. "What I will not do is to have that negotiation with a
gun at the head of the American people," he told a news
Republican leaders quickly reiterated their demand that
increasing the debt limit must be accompanied by spending
With an agreement to prevent the so-called fiscal cliff of
sharp spending cuts and tax increases barely two weeks old,
Obama faces another fiscal showdown with congressional
A trio of deadlines looms around the end of February: the
need to raise the debt ceiling, automatic deep spending cuts
temporarily put off in the fiscal cliff deal, and the end of
a stopgap government funding measure.
The United States could default on its debt if the borrowing
limit is not increased.
Some Republicans have said they would require
dollar-for-dollar spending cuts to match any increase in the
debt limit. Obama's unexpected news conference could have
been a pre-emptive strike aimed at influencing strategy
sessions among Republican lawmakers scheduled for later this
A number of Republicans have said they would be willing to
allow a US debt default or a government shutdown to force the
Obama administration to accept deeper spending cuts than the
White House would like.
Obama said he would agree to talk about steps to trim the US
budget deficit, but made clear he wants to keep that
discussion separate from the debt ceiling increase. He held
to his position that deficit reduction should include
measures to raise revenue and not come from spending cuts
Republicans have rejected that approach, saying the fiscal
cliff deal, which raised taxes for the wealthy while
maintaining low tax rates for most Americans, should have put
to rest the discussion over tax increases.
Obama must get "serious about spending and the debt limit is
the perfect time for it," Senate Republican leader Mitch
McConnell said in a statement just moments after Obama's news
Republican John Boehner, the House of Representatives
speaker, said: "The American people do not support raising
the debt ceiling without reducing government spending at the
If Congress fails to raise the US debt limit, the Treasury
Department will become unable to borrow money to pay for
government spending obligations, leading to a debt default
that would damage US credit and have wide repercussions in
financial markets around the world.
Protracted haggling over raising the debt ceiling in 2011
brought the nation close to default and resulted in a credit
rating downgrade and financial market turmoil that slowed
Fiscal issues loomed large during the final news conference
of Obama's first term, which came a week before a gala
inauguration ceremony that will launch his next four years.
Fights with Congress over taxes and spending have
overshadowed much of his domestic agenda over most of the
last two years with the president facing legislative gridlock
that shows little sign of abating.
Obama raised the specter of a severe setback to the US
economy if congressional Republicans persist with the threat
of a debt default.
"It would be a self-inflicted wound on the economy," he said.
"Even entertaining the idea of this happening, of the United
States of America not paying its bills, is irresponsible.