Obama: If debt limit not raised, financial crisis possible

WASHINGTON Tue Jun 14, 2011 11:09am EDT

President Obama departs aboard Air Force One at the Miami International Airport in Florida for Puerto Rico, June 14, 2011. REUTERS/Larry Downing

President Obama departs aboard Air Force One at the Miami International Airport in Florida for Puerto Rico, June 14, 2011.

Credit: Reuters/Larry Downing

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WASHINGTON (Reuters) - President Barack Obama warned on Tuesday there could be another global financial crisis if Congress failed to raise the national debt ceiling.

But in an interview with NBC's "Today" show, Obama also said he took Republican leaders at their word that they want to avoid such a situation and he expects a deal to increase the debt limit "in a sensible way."

"The full faith and credit of the United States is the underpinning not only of our way of life, it's also the underpinning of a global financial system. We could actually have a reprise of a financial crisis, if we play this too close to the line. So we're going be working hard over the next month," he said.

(Reporting by Matt Spetalnick; Editing by Doina Chiacu)

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Comments (24)
Why do we need to raise the debt ceiling at all? Why can’t we just spend the revenue we take in already and make due with that? It’s like Ron Paul has said, maybe if we cut foreign aid to every country in the globe and ended our 4 wars Iraq, Afghan, Libya, Yemen then we would be able to live within our means. But no Obama wants to continue our policy of being the global welfare, warfare State at a time when we are $14 Trillion in debt and unemployment is 9.1%! Why on earth would someone reelect someone who would continue these madman policies with the reality we are facing?!

Jun 14, 2011 9:18am EDT  --  Report as abuse
freud101 wrote:
The Reublicans are following a “rule or ruin” strategy. So far they have done pretty well on the “ruin” part of it. I hope that this is not the new future trend in American government.

The debt limit was never meant to be used in this way. It was instituted as a way of allowing Congress to exert overall budgetary oversight without having to approve every nickel and dime spent via a separate bill. In the future, when we have a larger number of reasonable folks in Congress, I hope that the debt limit process will be changed. It would make more sense to institute a standing 5 or 10 percent increase in the limit every time it is reach with Congress having the right to cut the increase. Cutting the increase below the amount that would provide enough money for the country to pay its debts for the next 12 months should require a 2/3 vote. That would be a reasonable limit that would not put our economy in jeapardy.

Perhaps there are some Republicans who actually think that it is our deficit that impeding the recovery but I doubt that very many of them actually believe that. Most of them probably recognize that we need an additional economic stimulus but they must hope that they can ruin the recovery just enough to regain power and then they can switch gears and get the credit for the eventual improvement. This is a very dangerous game to play.

Jun 14, 2011 9:25am EDT  --  Report as abuse
A-R-Med wrote:
Has anyone mentionted to the President that over 50% of Cree’s manufacturing has moved to China because it is not effective to manufacture here – which leads to his recent comments that the debt ceiling is all about jobs. The novelty of this guy is waning. Do something already Mr. President rather than pontificating!!

Jun 14, 2011 9:52am EDT  --  Report as abuse
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