WASHINGTON – President Barack Obama bluntly told Republican congressional leaders Wednesday they must compromise quickly if the government is to avoid an unprecedented default, adding, “Don’t call my bluff” while passing a short-term debt limit increase he has threatened to veto.
The presidential warning, directed at House Majority Leader Eric Cantor, R-Va., marked an acrimonious end to a two-hour negotiating session at the White House that produced no evident progress toward a compromise.
Another round of talks is set for Thursday.
With a threatened default less than three weeks away, Moody’s Investors Service announced it was reviewing the U.S. bond rating for a possible downgrade, and the Treasury said the annual deficit was on a pace to exceed $1 trillion for the third year in a row.
With the negotiations at a seeming standstill, Republicans drew a warning of a different sort, from an unlikely source – the party’s Senate leader, Sen. Mitch McConnell of Kentucky.
In an interview with radio talk-show host Laura Ingraham, McConnell warned fellow conservatives that failure to raise the debt limit would probably ensure Obama’s re-election in 2012.
McConnell predicted that if Congress fails to act, Obama will argue “that Republicans are making the economy worse and try to convince the public, maybe with some merit, if people start not getting their Social Security checks and military families start getting letters saying their service people overseas don’t get paid.”
“You know, it’s an argument he has a good chance of winning, and all of a sudden we (Republicans) have co-ownership of a bad economy,” McConnell said. “That is very bad positioning going into an election.”