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Prodding Congress to act, Obama warns of 'collateral damage' to nation in debt fight

July 25, 2011|By Christi Parsons and Lisa Mascaro
(Jim Watson, Getty Images )

President Obama on Monday issued a grave warning against prolonging the current political stalemate and specifically called on the freshmen in the House Republican caucus to bring it to an end.

In an evening address to the nation, Obama asked Americans to call their members of Congress and pressure them to raise the legal limit on the federal government's borrowing power so the country can pay its bills a week from now.

Americans are fed up with a system in which compromise has become a "dirty word," Obama said, in a portion of his remarks aimed directly at conservative first-term members in the House. The economy will take a dangerous turn in the next few days if Republicans and Democrats don't end the conflict now, he said.

"It is a dangerous game we've never played before, and we can't afford to play it now," Obama said. "Not when the jobs and livelihoods of so many families are at stake.  We can't allow the American people to become collateral damage to Washington's political warfare."

Republican House Speaker John A. Boehner (R-Ohio) immediately challenged Obama's account of the debt standoff, saying in his own nationally televised speech that there is no stalemate in Congress.

The real problem, he said, is that Obama "wants a blank check." That, he said "is not going to happen." Government has become "so big and so expensive it's sapping the drive of our people," he added. "There is no symptom of big government more menacing than our debt. Break its grip, and we begin to liberate our economy and our future."

But the dueling speeches illustrate the depth of the conflict, just seven days from the Aug. 2 deadline when Treasury officials estimate the government will run out of cash to pay its bills. If the Congress hasn't voted by then to raise the debt limit, currently $14.3 trillion, the government will no longer be able to borrow funds to cover its deficit and will have to choose which bills to pay. That could mean that millions of government beneficiaries expecting Social Security checks, disability payments or salaries will go without or get much less than expected.
 
Predictions of economic calamity grow more dire by the day as markets begin to react to the uncertainty and the apparent intransigence in Washington.

Over the past two weeks, Obama and Boehner have appeared at times on the verge of reaching a compromise. Republicans want to see large spending cuts to reduce the national debt and deficit before they vote to allow more borrowing.

Democrats want what they call a "balanced approach" that cuts spending but also raises taxes on the wealthy and prosperous corporations.

In his speech, Obama made the case once again for his balanced approach, emphasizing the deep cuts he and fellow Democrats have been willing to consider – including those that would hit seniors on Medicare.

Yet while calling for Americans to push for that balanced approach if they agree with it, he also acknowledged that another route is probably necessary. He embraced a plan offered by Senate Majority Leader Harry Reid, even though it includes none of the new tax revenue he wants to see.

He argued against the House plan to push off the debt crisis for a few months, at which point Obama predicted Republicans will refuse to prevent default "unless the rest of us accept their cuts-only approach."

"Once again, the economy will be held captive unless they get their way," Obama said. "That is no way to run the greatest country on Earth."

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