US President, Barack Obama, has sent Wall Street a blunt warning that it should be very worried about a political crisis that has shut down the government and could trigger a US debt default.
Obama said he was “exasperated” by the budget impasse in Congress, in an interview with CNBC apparently designed to pressure Republicans by targeting the financial community moments after markets closed.
The President then met Republican and Democratic leaders for their first talks since the US Government money ran out and it slumped into a shutdown now well into its second day.
But few informed observers held out much hope for a sudden breakthrough.
Obama was asked in the interview whether Washington was simply gripped by just the latest in a series of political and fiscal crises which reliably get solved at the last minute.
In unusually frank comments on issues that could sway markets, Obama warned that investors should be worried.
“This time’s different. I think they should be concerned,” Obama said, in comments which may roil global markets.
“When you have a situation in which a faction is willing potentially to default on US government obligations, then we are in trouble,” Obama said.
Obama said he would not negotiate with Republicans on budget matters until House lawmakers pass a temporary financing bill to reopen federal operations and raised the $16.7 trillion dollar debt ceiling.
If the borrowing limit is not lifted by the middle of the month, the US Government could default on its debts for the first time in history.
“If and when ... that vote takes place and the Government reopens, and if and when they vote to make sure Congress pays our bills on time so America does not default on costs it’s already accrued, then I am prepared to have a reasonable, civil negotiation around a whole slew of issues,” Obama said.
The President said he had “bent over backwards” to accommodate Republicans — a statement his foes would dispute — but warned it would set a terrible precedent to allow lawmakers of any party to hold a White House to ransom over raising the debt ceiling.
“Absolutely I am exasperated, because this is entirely unnecessary,” Obama said.
The Government shutdown has sent 800,000 federal workers home, closed museums, national parks and monuments and crippled government services.
Obama wants a straightforward temporary spending bill to end the first shutdown in 17 years, while Tea Party Republicans have repeatedly tied the measure to a dismantling or delay of his signature health care law.