Transcript: President Barack Obama’s press conference on the government shutdown & debt ceiling – Oct. 8, 2013 – Part II

Part II of VI: Transcript of remarks by President Barack Obama on the government shutdown and debt ceiling. The press conference was held on Oct. 8, 2013.

…If Congress does pass a clean CR and a clean debt ceiling bill, those may be just short-term measures. If that happens, does your offer to negotiate with them on issues like health care and spending and deficit reduction still stand in the intervening weeks that they pass a budget that are just perhaps 6 weeks…?

President Barack Obama:
Absolutely. I mean, what I’ve said is that I will talk about anything. What will happen is we won’t agree on everything. I mean, the truth is that the parties are pretty divided on a whole bunch of big issues right now. Everybody understands that. And by the way, voters are divided on a lot of those issues too.

And I recognize that there are some House members – Republican House members where “I got clobbered in the last election” and they don’t get politically rewarded a lot for being seen as negotiating with me, and that makes it harder for divided government to come together.

But I am willing to work through all those issues. The only thing that our democracy can’t afford is a situation where one side says, “Unless I get my way and only my way, unless I get concessions before we even start having a serious give and take, I’ll threaten to shut down the government or I’ll threaten to not pay America’s bills.”

So I will not eliminate any topic of conversation, and I’ve shown myself willing to engage all the parties involved – every leader – on any issue.

And that applies for how long the time frame is on the debt limit bill they will pass?

President Barack Obama:
The only thing that I will say is that we’re not going to pay a ransom for America paying its bills. That’s something that should be non-negotiable, and everybody should agree on that. Everybody should say, “One of the most valuable things we have is America’s creditworthiness.” This is not something we should even come close to fooling around with.

And so when I read people saying, “This wouldn’t be a big deal. We should test it out. Let’s take default for a spin and see how it rides.”

And I say imagine in your private life if you decided that “I’m not going to pay my mortgage for a month or two.” First of all, you’re not saving money by not paying your mortgage. You’re just a deadbeat. And you can anticipate that will hurt your credit, which means that in addition to debt collectors calling, you’re going to have trouble borrow in the future. And if you are able to borrow in the future, you’re going to have to borrow at a higher rate.

Well, what’s true for individuals is also true for nations, even the most powerful nation on Earth.

And if we are creating an atmosphere in which people are not sure whether or not we pay our bills on time, then that will have a severe long-term economic impact on our economy and on America’s standard of living, and that’s not something we should even be in a conversation about. That is not something that we should be using as leverage.

…You read out the economic consequences of default, but if we were to get to that point, would you prioritize the bond holders first to maintain a somewhat of a credit or rather than Social Security recipients or military service men and women? How would you…make that determination?

President Barack Obama:
I am continue to be very hopeful that Congress does not put us in that position. I think if people understand what the consequences are, they will set that potential scenario aside.

I do know that there have been some who’ve said if we just paid bond holders, we just pay people who’ve bought Treasury bills, that we really won’t be in default because those interest payments will be made. And to them, what I’ve got to remind them is we’ve got a lot of other obligations, not just people who paid for Treasury bills. We’ve got senior citizens who are counting on their Social Security checks arriving on time. We have veterans who are disabled who are counting on their benefits. We have companies who are doing business for our government and for our military that have payrolls that they have to meet and if they do not get paid on time, they may have to lay off workers. All those folks are potentially affected if we are not able to pay all of our bills on time.

What’s also true is if the markets are seeing that we’re not paying all of our bills on time, that will affect our creditworthiness even if some people are being paid on time.

So again, just to boil this down to personal examples. If you’ve got a mortgage, a car note, and a student loan that you have to pay, and you say, “Well, I’m going to make sure I’m going to pay my mortgage but I’m not going to pay my student loan or my car note”, that’s still going to have an impact on your credit. Everybody is still going to look at that and say, “You know what? I’m not sure this person’s that trustworthy.” And at a minimum, presumably they’re going to charge a higher interest rate. That’s what would happen to you if you made those decisions. Well, the same is true for the federal government.

So we are exploring all contingencies. I know that Secretary Lew – the Secretary of the Treasury – will be appearing before Congress on Thursday and he can address some of the additional details about this. But let me be clear: No option is good in that scenario. There’s no silver bullet. There’s no magic wand that allows us to wish away the chaos that could result if for the first time in our history we don’t pay our bills on time.

And when I hear people trying to downplay the consequences of that, I think that’s really irresponsible. And I’m happy to talk to any of them individually and walk them through exactly why it’s irresponsible.

And it’s particularly funny coming from Republicans who claim to be champion of business. There’s no business person out here who thinks this won’t be a big deal. Not one. You go anywhere from Wall Street to Main Street and you ask a CEO of a company or ask a small business person whether it’d be a big deal if the United States government doesn’t pay its bills on time, they’ll tell you it’s a big deal. It would hurt.

And it’s unnecessary – that’s the worst part of it. This is not a complicated piece of business. And there’s no reason why if in fact Republicans are serious about wanting to negotiate, wanting to have a conversation, wanting to have a talk, there’s no reason why you have to have that threat looming over the conversations.

I mean, think about it. The only reason that the Republicans have held out on negotiations up until the last week or so is because it was a big enough deal that they would force unilateral concessions out of Democrats and out of me. They said so! They basically said, “You know what? The President’s so responsible that if we just hold our breath and just say, ‘We’re going to threaten default’ then he’ll give us what we want and we don’t have to give anything in return.” Again, that’s not my account of the situation. You can read statements from the Republicans over the last several months who said this explicitly.

And so for them now to say it wouldn’t be a big deal if it happens, that’s not how they’ve been acting over the last couple of months. And if it’s not a big deal to them, then why would I give them concessions now to avoid it? It is a big deal, and nobody should be getting concessions for making sure the full faith and credit of the United States is retained.


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