WASHINGTON -- President Barack Obama vowed Monday he would not negotiate with Republicans over the federal debt ceiling, warning Social Security checks would be delayed and the nation could enter a recession if Republicans do not agree to raise the limit on government borrowing.
In the final news conference of his first term, Obama said Republicans were threatening to hold "a gun at the head of the American people" and he would not trade spending cuts, as Republicans demand, for an agreement to raise the federal debt ceiling.
"If congressional Republicans refuse to pay America's bills on time, Social Security checks and veterans benefits will be delayed. We might not be able to pay our troops," Obama said, ratcheting up the rhetoric over the looming deadline to raise the $16.4 trillion debt ceiling.
"Investors around the world will ask if the United States is, in fact, a safe bet. Markets could go haywire," he said. "It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession. And ironically it would probably increase our deficit."
Obama added: "To even entertain this happening -- of the United States of America not paying its bills -- is irresponsible. It's absurd."
He vowed that congressional Republicans "will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip."
Obama said he still wanted to reach a compromise to stabilize borrowing over the long term but that willingness to negotiate does not extend to the debt ceiling, which covers obligations Congress already has incurred.
"If we combine a balanced package of savings from health care and revenues from closing loopholes, we can solve the deficit issue," Obama said. The American people "made a clear decision about the approach they prefer . . . They don't think it's smart to protect endless corporate loopholes and tax breaks for the wealthiest Americans rather than rebuild our roads and our schools, invest in our workers' skills, or help manufacturers bring jobs back to America."