US President Obama has said he is willing to hold budget talks with Republicans, but not until they agree to lift “threats” against the economy.
Mr Obama likened Republicans’ wielding a looming deadline of 17 October, when the US reaches its borrowing limit, to political “extortion”.
The US government shut down last week when Congress failed to agree a budget.
Republican leaders on Tuesday reiterated calls for Mr Obama to open negotiations over ending the impasses.
At the White House, Mr Obama said he had spoken with Republican House Speaker John Boehner and was “happy to talk with him and other Republicans about anything”.
But Mr Obama said any negotiations on the ongoing government shutdown or the debt limit “shouldn’t require hanging the threats of a shutdown or economic chaos over the heads of the American people”.
‘Very deep recession’
He also warned of the repercussions of defaulting on the government’s debt should Congress fail to raise the borrowing limit, which is currently set to be reached on 17 October.
Mr Obama said crossing the debt limit could disrupt capital markets, undermine international confidence in America, permanently increase the nation’s borrowing costs and add to its deficits and debt, and pose the “significant risk of a very deep recession”.
The US president also said Republicans had yet to offer any serious positions from which to resolve the ongoing political gridlock, saying they had instead decided to “run out the clock” in order to “give them more leverage”.
On Tuesday, Mr Boehner told reporters he “wanted to have a conversation” with Mr Obama and congressional Democrats.
“I’m not drawing lines in the sand,” he said. “It is time for us to just sit down and resolve our differences.”
The US government partially shut down operations on 1 October after Republicans who control the House of Representatives refused to approve a budget, saying they would only do so if Mr Obama’s healthcare reform law were delayed or stripped of funding.
Mr Obama and the Democrats have thus far refused, noting the law was passed in 2010, subsequently approved by the Supreme Court, and was a central issue in the 2012 election which Mr Obama won handily.
At the same time, the Republicans have refused to approve an increase in the US debt limit unless it is accompanied by significant changes to Mr Obama’s health law.
‘Too much shock’
US and foreign officials have been warning of severe economic consequences if the US defaults on its debt.
Last week, US Commerce Secretary Penny Pritzker said “the shutdown is not good for business, it’s not good for the economy” while attending the Asia-Pacific Economic Cooperation (Apec) in Bali.
Philippine President Benigno Aquino warned that what happens in the US “affects us all”.
“The US economy is the number one economy in the world,” he said. “The world economy obviously is not in a position to withstand too much shock at this time.”
On Monday, US defence contractor Lockheed Martin said it would put 3,000 workers on unpaid leave, saying that number would rise if the government shutdown continued.
That announcement followed United Technologies’ decision to lay off 2,000 employees temporarily, saying manufacturing had halted because there were no government inspectors working to sign off products.
Source: BBC News
