Obama to ask business leaders to push Congress to raise debt limit

Reuters

By Steve Holland

WASHINGTON, Sept 18 (Reuters) - President Barack Obama willappeal to business leaders on Wednesday to urge Congress toapprove an increase in the U.S. debt limit and avoid a defaultthat is possible as early as mid-October.

Obama is to address the Business Roundtable as part of arenewed push to focus on domestic budget and economic issuesafter a month dominated by foreign policy.

The U.S. Treasury is expected to exhaust measures to avoidexceeding the $16.7 trillion debt limit as soon as mid-October.If the cap is not raised, the United States will not be able topay all of its bills and would go into default.

Obama will tell business leaders that they should pilepressure on Congress, which must vote to increase U.S. borrowingcapacity, to avoid a default.

Republicans in the House of Representatives last weekconsidered a plan to tie raising the debt limit to withholdingfunds for Obama's signature healthcare overhaul, but put off avote because the party's most fiscally conservative members feltthe plan lacked teeth.

It is possible that a federal government shutdown and debtdefault could result from the budget standoff, although such anoutcome has been avoided in past spending battles.

A White House official said Obama "will ask the businesscommunity to help send the message to Congress that a defaultwould be disastrous for our economy and for businesses acrossthe country."

"Many reasonable Republicans have said it would be recklessand irresponsible to use the threat of default as a bargainingchip, but some of the extreme members of the Republican Partycontinue to threaten the full faith and credit of the UnitedStates government," the official said.

Obama has warned he will not negotiate over the debt limit.

Brendan Buck, spokesman for House Speaker John Boehner, thetop Republican in Washington, said Republicans are notthreatening a debt default.

"The president only uses these scare tactics to avoid havingto show the courage needed to deal with our debt crisis. Everymajor deficit deal in the last 30 years has been tied to a debtlimit increase, and this time should be no different," Bucksaid.

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