In Budget Faceoff, Obama Warns of 'Economic Chaos'

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AP, Pablo Martinez Monsivais
By ANDREW TAYLOR and JIM KUHNHENN

WASHINGTON -- A potential federal shutdown looming, President Barack Obama on Monday warned congressional Republicans they could trigger national "economic chaos" if they demand a delay of his health care law as the price for supporting continued spending for federal operations.

House Republican leaders were to meet Tuesday in hopes of finding a formula that would avoid a shutdown on Oct. 1 without alienating party conservatives who insist on votes to undercut the Affordable Care Act. Even more daunting is a mid- to late-October deadline for raising the nation's borrowing limit, which some Republicans also want to use as leverage against the Obama administration.

"Are some of these folks really so beholden to one extreme wing of their party that they're willing to tank the entire economy just because they can't get their way on this issue?" Obama said in a speech at the White House. "Are they really willing to hurt people just to score political points?"

The Republicans don't see it that way.

House Speaker John Boehner, who opposes the threat of a shutdown, said, "It's a shame that the president could not manage to rise above partisanship today." Obama, said Boehner, "should be working in a bipartisan way to address America's spending problem, the way presidents of both parties have done before," and should delay implementation of the health care law.

While some conservatives supported by the tea party have been making shutdown threats, Sen. Rand Paul of Kentucky said Monday that was "a dumb idea." At a community meeting in Louisville, he said, "We should fight for what we believe in and then maybe we find something in between the two. ... I am for the debate, I am for fighting. I don't want to shut the government down, though. I think that's a bad solution."

Obama timed his remarks for the fifth anniversary of the bankruptcy of Wall Street giant Lehman Brothers, a major early event in the near-meltdown of the U.S. financial system and a severe global recession that preceded his presidency. He used the occasion to draw attention to the still-recovering economy and to what he called a "safer" financial system now in place.

He delayed his remarks as authorities responded to the shootings that officials said left at least 13 people dead at the Washington Navy Yard just a few miles from the White House.

While unemployment has dropped to 7.3 percent from a high of 10 percent and the housing market has begun to recover, the share of long-term unemployed workers is double what it was before the recession, and a homebuilding revival has yet to take hold. A new analysis conducted for The Associated Press shows that the gap in employment rates between America's highest- and lowest-income families has stretched to its widest level since officials began tracking the data a decade ago.

Obama conceded the problems. "As any middle class family will tell you or anybody who's striving to get in the middle class, we are not yet where we need to be," he said.

Still, his National Economic Council argued his case for progress, issuing a report detailing policies that it said had helped return the nation to a path toward growth. Those steps ranged from the unpopular Troubled Asset Relief Program, or TARP, that shored up the financial industry and bailed out auto giants General Motors and Chrysler, to an $800 billion stimulus bill and sweeping new bank regulations. Of the $245 billion that the government injected into the banking system, virtually all of it has been paid back, the report noted.

"After all the progress that we've made over these last four and a half years, the idea of reversing that progress because of an unwillingness to compromise or because of some ideological agenda is the height of irresponsibility," Obama said. He reiterated his stance that he will not negotiate over the debt ceiling. Failure to raise it could lead to the first national default in U.S. history.

Conservative Republicans, on the other hand, say the health care law, which has yet to take full effect, will place a burden on businesses and the public and will damage the economy. As a result, they insist that it be starved of taxpayer money or at least delayed.

Chances are fading for a complicated GOP leadership plan that would allow the House to also vote to "defund Obamacare" but automatically separate the measures when delivering them to the Senate to ease the way for quick passage of a "clean" funding measure for delivery to Obama.

The next steps aren't clear, but one option under consideration is to accede to conservatives' demands to deliver to the Democratic Senate a combined bill that pays for government and defunds the health care law. The Senate would be virtually certain to strip away the attack on the health care law and bounce the funding measure right back to the House.

That scenario might frustrate conservatives, with the funding measure probably gaining enough votes to win passage in the House and proceed to the White House for Obama's signature.

Stopgap spending bills are usually routine, so the difficult path for the current one hardly inspires confidence for an even more important measure to raise the government's borrowing cap. Republicans want to use the debt limit measure as a mechanism to win further spending cuts on top of those they forced upon Obama two years ago.

It's not clear how the debt limit conundrum will be solved, though a time-tested recipe would be to add mostly symbolic reforms like a "no budget, no pay" proposal that worked early this year when House leaders orchestrated a debt limit increase that was intended to last through July or so but is now likely to suffice until mid-late October. The idea was that lawmakers wouldn't get paid if the chamber in which they served didn't pass a budget. It was a House GOP jab aimed at the Senate, which hadn't passed a budget since 2009. This year it did but there's been no effort to reconcile it with a competing House measure.

Obama intends to continue pressuring Congress with daily events this week, including a speech Wednesday to the Business Roundtable, an association of CEOs from the top U.S. companies, and a trip Friday to Kansas City to visit a Ford plant, where he will promote the strength of the auto industry.

Associated Press writer Bruce Schreiner in Louisville, Ky., contributed to this report.

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162 Comments

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Evelyn

Obama's entire administration and his presidency has been the "height of irresponsibility"!

September 18 2013 at 6:00 PM Report abuse +1 rate up rate down Reply
soccerus

Middle class America has been dealing with economic chaos since Ronald Reagan and his different administrators introduced us to their trickle down disaster. The top 2% has enjoyed bliss, the rest of us-chaos

September 18 2013 at 4:11 AM Report abuse +7 rate up rate down Reply
Ange Purs

We've been warned about things a lot by Obama. I guess he must think we Americans are
just plain stupid. Every time he's asked a question, we get a history lesson about what he has done for us...in case we have been asleep for the past 5 yrs. Is this good leadership? Is this leadership that has value? Scare people to get them to go along with some particular view. Wonderful. Obama appears to be becoming more irrelevant with each new day.

September 18 2013 at 2:37 AM Report abuse -4 rate up rate down Reply
Brian Hope

"Mark my word, if and when these preachers get control of the [Republican] party, and they're sure trying to do so, it's going to be a terrible damn problem. Frankly, these people frighten me. Politics and governing demand compromise. But these Christians believe they are acting in the name of God, so they can't and won't compromise. I know, I've tried to deal with them."

These preceding remarks - and many others like them - were made by the late Sen. BARRY GOLDWATER. I'm sure Pres. Obama would love to be made aware of this piece of history, so that it could be publicized to the hilt.

September 18 2013 at 12:43 AM Report abuse +4 rate up rate down Reply
bfliny

Since Obama took office, Boehner & especially the Tea Party have refused to compromise and have threatened shutting down the government if they don't get their way. Now, Boehner is accusing the President of not talking in good faith & not compromising about several issues. Does Boehner really believe the American people are going to fall for this? We have seen what the Tea Party has done in the past & they have openly said they will not compromise, so Boehner can't even control his own party. If the government is pushed to shut down, we will all know who is to blame & it isn't the President, who has been trying since day 1 to work with the other party. And the Tea Party people have done their best to confuse the American people about raising the debt ceiling. This money would go for items already voted on & approved. In terms of the average person, you go out, buy a car, & take out a loan. You are now responsible for those payments or the company can take away your car. But, let's say you see a beautiful $250k boat that you really want, but can't afford, so you do not buy it. You are now not responsible for payments on that boat because you did not buy it. The debt ceiling is only for items already purchased. Don't let the Tea Party confuse you about how this money will be spent. At this point, I would love for the President to stand firm and have the decision to shut down the government be in Boehner's hands. Let's see how he will wiggle out of this one.

September 18 2013 at 12:29 AM Report abuse +6 rate up rate down Reply
1 reply to bfliny's comment
Ange Purs

Shutting down the government will be a thoroughly dumb move whoever is responsible. Obama doesnt hold the high ground on compromise or smart leadership. He's as intransigent as is the right wing. What Obama has going for him, which appears to have less and less value, is his oratory skills. He's good at the words, be cant put the package together and lead it thru Congress. It's easy to blame the other side, but when the team captain has no leadership skills that matter in Washington, then the country is in for a bumpy ride that has been and will continue to go nowhere.

September 18 2013 at 2:45 AM Report abuse rate up rate down Reply
setanta54s_back

too quiet here-

going to huffiepoop to make their heads explode.

September 18 2013 at 12:28 AM Report abuse -7 rate up rate down Reply
setanta54s_back

are YOU AWARE that as usual,the PROP_a-ganda
is truly the PROP-agenda for the left progressives that HAS FULLY RIPPED OFF THE AMERICANS ?

all o'bummer hS TO DO is freeeeekin sign the budget .

but doing so DEFUNDS o'BUMMER CARE which is UNABLE TO BE FUNDED to begin with.



WAKE UP AMERICANS.
it's time.

it's REALLY TOO LATE
but WAKE UP and SPEAK UP.

September 18 2013 at 12:02 AM Report abuse -10 rate up rate down Reply
unique212

Oh, there he goes again. Mr. Feckless and Reckless is once more playing fast and loose with the facts. HE is the only one talking about shutting down the government. The Republicans want to fund each and every dollar of the federal government's existing obligations, except for the new ones caused by Obamacare.

Stop lying to us for one minute, Barry, and try being a president for a few days. Your beloved "bipartisanship" does NOT mean that all opposition to your agenda must lay down, roll over, and accept a good rear porking without benefit of lube. YOUR PARTY MUST COMPROMISE TOO.

September 17 2013 at 11:47 PM Report abuse -3 rate up rate down Reply
1 reply to unique212's comment
setanta54s_back

LET THEM SHUT IT THE F DOWN.

AT LEAST then,we;re SAFE FROM THEM AND THEIR BS.


shut it down.

let them riot and burn it all down too.

September 18 2013 at 12:04 AM Report abuse -12 rate up rate down Reply
jekap55

Why doesn't he just draw a red line and then threaten to bomb .

September 17 2013 at 11:33 PM Report abuse -10 rate up rate down Reply
1 reply to jekap55's comment
setanta54s_back

why you think they made damn sure to get your GPS location ?
and all the DofD crapolla allowing them to send drones and KILL Americans ?

September 18 2013 at 12:05 AM Report abuse -11 rate up rate down Reply
Larry

Little boy cries wolf every time there's a budget discussion. Grow up, little boy.

September 17 2013 at 11:22 PM Report abuse -9 rate up rate down Reply