- The Washington Times - Tuesday, October 8, 2013

With the government closed and the U.S. staring at default, President Obama told the world for more than an hour Tuesday that America has been weakened domestically and globally.

The president talked about businesses cutting back and workers being furloughed. He spoke of a “cloud of uncertainty” over the U.S. economy and its financial markets, and warned that the Treasury Department is exhausting its emergency “contingencies” to pay the nation’s bills.

Having missed two summits in Asia this week because of the shutdown, Mr. Obama said China could benefit from Washington’s deadlock. He even used the same phrase as a top Chinese official to describe his nation’s concerns as the top U.S. creditor: “The clock is ticking.”

“It hurts our credibility around the world,” Mr. Obama said. “It makes it look like we don’t have our act together.”

Mr. Obama’s message was intended to pressure and to shame House Republicans, especially Speaker John A. Boehner, into reopening the government and raising the nation’s borrowing limit without conditions. He also wanted to refute some lawmakers, particularly in the GOP, who believe a government default would not be calamitous in the short term.

Indeed, late in the day Sen. Tom Coburn, Oklahoma Republican, took to the Senate floor to say that if the government did default or halt payments to Social Security beneficiaries, it would be because Mr. Obama chose that route, not because the borrowing limit forced it.

“Only somebody who wants to hurt us further would play the political game if we ever got there … to not pay Social Security or not pay Medicare,” Mr. Coburn said. “We have more than enough money to do that.”

One result of Mr. Obama’s news conference was the startling spectacle of the president of the United States talking gloom and doom about his own country at length for all to hear — allies, enemies, investors and entrepreneurs alike.

It’s doubtful that the president reassured bondholders when a reporter asked him directly whether foreign creditors must be paid first in the event of a U.S. default. The president, a graduate of Harvard Law School and the veteran of another default standoff in 2011, appeared not to know the answer and feared he would say something wrong.

“I’m going to let Jack Lew, the secretary of the Treasury, make a formal presentation on Thursday before the Senate committee because this is obviously sensitive enough and I think people would be playing close enough attention that details count,” Mr. Obama said.

In 2011, Treasury was looking at prioritizing interest payments on government debt before paying other bills, but lawmakers reached a deal before any plan had to be implemented.

With no action in Congress, and Mr. Obama tossing around words like “catastrophe,” financial markets plummeted Tuesday. The Dow Jones Industrial Average dropped more than 1 percent.

Of course, the president blamed Mr. Boehner.

“We’re not going to calm creditors until they see Speaker Boehner call up a bill that reopens the government and authorizes the secretary of Treasury to pay our bills on time,” Mr. Obama said. “And until they see that, there’s going to be a cloud over U.S. economic credibility.”

Mr. Boehner, in his own news conference, replied that presidents have regularly negotiated with Congress over debt increases and spending, and he said this time will be no different.

He also accused Mr. Obama of scuttling a 2011 deal that could have raised some taxes and cut spending, which could have set the country on firmer fiscal footing.

“This isn’t about me and frankly, it’s not about Republicans,” Mr. Boehner said. “This is about saving the future for our kids and our grandkids, and the only way this is going to happen is to in fact have a conversation.”

The president did cheerlead occasionally, calling the U.S. “the one indispensable nation.” But he said the U.S. is losing face internationally due to the shutdown and debt crisis, and referred to his absence at the Asia summmits, where he had hoped to close a trade deal.

“I’m sure the Chinese don’t mind that I’m not there right now,” Mr. Obama said. “I should have been there.”

Could he reassure other nations that the U.S. won’t default on its obligations? Mr. Obama’s answer was a qualified yes, but he also raised doubts about whether his own word was any good.

“Obviously my message to the world is the United States always has paid its bills and it will do so again,” Mr. Obama said. “But I think they’re not just looking at what I say; they’re looking at what Congress does. And that ultimately is up to Speaker Boehner.”

And Americans don’t usually hear their president apologize for the state of affairs, but Mr. Obama did that, too.

“To all the American people, I apologize that you have to go through this stuff every three months, it seems like. And Lord knows I’m tired of it,” the president said.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More

Click to Hide