President Barack Obama said he expects Congress will reach an agreement to raise the nation’s $16.7 borrowing limit in time to avert a default.
“America has never not paid its bills,” Obama said in an interview with the Associated Press. “I don’t expect to get there.”
The interview was released today as a partial shutdown of the U.S. government entered its fifth day and less than two weeks before an Oct. 17 deadline for raising the U.S. debt ceiling. Obama said comments yesterday from House Speaker John Boehner, an Ohio Republican, indicate that “Speaker Boehner is willing to make sure that we don’t default.”
The U.S. president asked Americans for patience after technological glitches have made it difficult for millions of Americans to access a website that opened Oct. 1 for the six-month open enrollment period under the U.S. health-care law that is his signature domestic policy.
“The website got overwhelmed by volume,” he said of the higher than expected interest in the program. “The insurance doesn’t start until January. So they’ll have plenty of time.”
Obama also said in the interview that U.S. intelligence officials continue to believe Iran is “a year or more away” from the ability to produce a nuclear weapon.
Redskins Name
The president also waded into the politics of professional sports, saying while fans of the Washington Redskins football team don’t mean to offend, keeping the name, a slur to Native Americans, may not be worth “the real legitimate concerns” and “I’d think about changing it.”
The federal government shutdown that has furloughed about 800,000 federal employees is becoming a prolonged deadlock that is merging with the debate over the U.S. debt ceiling.
The U.S. will run out of borrowing authority on Oct. 17 and will have $30 billion in cash after that. The country would be unable to pay all its bills, including benefits, salaries and interest, sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Unlike budget clashes, the current standoff revolves around Republicans opposition to Obama’s health-care law. House Speaker John Boehner is insisting Democrats make concessions on the 2010 Affordable Care Act to provide the funds to keep the government open.
Obama canceled an eight-day trip to Asia to promote economic and national security policy because of the government shutdown. The Treasury Department said on Oct. 3 that breaching the debt limit may have catastrophic results that last decades, such as higher interest rates and slower growth.
Market Reaction
U.S. stocks rose yesterday on optimism lawmakers would come to an agreement, pushing the Standard & Poor’s 500 Index up 0.7 percent yesterday in New York, after sliding during the previous two days. Ten-year Treasury yields rose from almost a seven-week low, increasing four basis points to 2.65 percent, according to Bloomberg Bond Trader prices.
As the economy has revived, the budget deficit has shrunk as a share of the economy: in June, it was 4.3 percent of gross domestic product, down from 10.1 percent in February 2010 and the narrowest since November 2008, when Obama was elected to his first term, according to data compiled by Bloomberg from the Treasury Department and the Bureau of Economic Analysis.
After a private meeting of House Republicans yesterday, Boehner criticized Obama’s refusal to negotiate on any changes to the health law.
“The White House’s refusal to negotiate is putting the nation at risk of default,” Boehner spokesman Brendan Buck said today. “If we’re going to resolve this, we’re going to have to work together.”
The Bureau of Labor Statistics didn’t release yesterday’s monthly report on unemployment, repeating what it did in the 1996 shutdown. U.S. Trade Representative Michael Froman said in a statement that the government wouldn’t be able to participate in next week’s second round of negotiations on the Trans-Atlantic Trade and Investment Partnership in Brussels.-Bloomberg
