WASHINGTON — In a blistering warning to congressional Republicans, President Barack Obama said Monday it would be the “height of irresponsibility” for lawmakers to cause a new economic crisis just five years after the near-collapse of the nation’s financial system.
“I cannot remember a time when one faction of one party promises economic chaos if it can’t get 100 percent of what it wants,” Obama said, contending that the stance of some conservative lawmakers amount to just that.
Some of those Republicans say they will vote to extend current spending levels or to increase the nation’s debt ceiling only if Obama delays putting in place his health care law, a condition Obama has rejected. Others say that scheduled spending cuts should stay in place to reduce the deficit, while Obama wants the “sequestration” cuts reworked.
The president spoke at a White House event pegged to the fifth anniversary of the bankruptcy of the Lehman Brothers investment bank, which marked the beginning of a global financial crisis. The White House used the anniversary to lay out the president’s markers for upcoming fiscal fights with Congress over funding the government and raising the nation’s debt limit.
Obama reiterated his refusal to negotiate with Republicans over the debt ceiling. And he called on Congress to “pass a budget without drama.”
The president was flanked by Americans the White House says have benefitted from his administration’s economic and banking policies. Those policies, he said, have laid a “new foundation” for economic growth, though he acknowledged that the recovery is not being felt by many middle class people.
The White House’s National Economic Council on Sunday issued a report detailing policies that it says have helped put the economy on a path toward growth. Those steps range 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 to sweeping new bank regulations.
Gene Sperling, a top Obama adviser and director of the National Economic Council, said Obama’s policies “have performed better than virtually anyone at the time predicted.”
But the public is not convinced that the economy is on the mend. Only one-third say the economic system is more secure now than in 2008, and 52 percent say they disapprove of Obama’s handling of the economy, according to a Pew Research Center poll. There is still plenty of pain to justify their pessimism.
Despite job growth, the unemployment rate remains high at 7.3 percent. Though the rate has fallen, one of the reasons is because some people have dropped out of the labor force and no longer are counted as job seekers. The share of unemployed workers who have been unemployed for more than six months is more than double what it was in 2007 before the recession began. And the income gap between the very rich and the rest of the population is the biggest since 1928.
What’s more, some banks that received government aid because they were deemed “too big to fail” are now bigger than they were in 2008, although they are smaller as a share of the economy than the largest banks in other big economies. Three years after Obama signed a sweeping overhaul of lending and high-finance rules, execution of that law is behind schedule.
Anxious to make his case with the public, Obama intends to draw attention to signs of progress with daily events, 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.
Obama wants to reverse automatic spending cuts that kicked in in March, but at the same time he has said he will not negotiate with Republicans over the nation’s debt ceiling. His remarks have hinted at a potential constitutional confrontation with Republicans. Section 4 of the 14th Amendment says that “the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
In addition to seeking a delay in Obama’s health care law, some Republicans say the scheduled spending cuts should stay in place to reduce the deficit.
“We need to start by keeping the cuts we’ve already agreed to,” Sen. Mitch McConnell said Sunday. “It’s time to get serious about the challenges we face and reposition America for growth and prosperity in the 21st century.”
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