Obama will deal on budget, not on debt limit: ABC interview

By Mark Felsenthal WASHINGTON (Reuters) - President Barack Obama, in an interview broadcast on Sunday, blamed conservative Republicans for a stalemate on the budget and insisted that while he is willing to haggle over taxes and government spending, he will not make a deal would that would impose conditions on increasing the nation's debt limit. With a possible government shutdown looming in two weeks, and the threat of a U.S. debt default as early as mid-October, Obama said on ABC's "This Week with George Stephanopoulos" that it is up to lawmakers to work out a budget. He insisted the budget should contain enough spending to help support economic growth and said he will not allow Republicans to attach conditions to raising the $16.7 trillion U.S. borrowing cap. "We've presented our budget," Obama said. "Now it's the job of Congress to come up with a budget that keeps our long-term trends of ... reducing the deficit moving forward, but also allows us to invest in the things we need to grow." Obama said trading cuts to his signature healthcare program in exchange for an increase in the nation's borrowing limit is not an option. "What I haven't been willing to negotiate, and will not negotiate, is on the debt ceiling," he said. With the crisis over Syria off the boil, Washington faces yet another fiscal showdown. Most government operations will cease on October 1 unless Congress passes a budget the president will accept and the United States risks a debt default as early as mid-October if lawmakers delay raising the borrowing cap. Obama and the Republican-led House of Representatives remain at loggerheads over both the budget and the debt limit. Republican lawmakers have sought to make defunding the president's signature healthcare law, the Affordable Care Act, also known as Obamacare, a condition for raising the cap. Obama's administration has delayed implementing such steps as signing final agreements with insurance plans to be sold on federal health insurance exchanges as it struggled to get the law's provisions in place before enrollment opens on October 1. "This administration has already delayed or waived fully a third of this legislation and we believe it is only fair for the American people now to have that same delay and that's the proposal I believe will be coming forward this week," Republican Representative Tom Price of Georgia said on "Fox News Sunday." Democratic Representative Chris Van Hollen said on the same program that legislation mandating delays in putting the law in place would stand in the way of making health insurance affordable to many Americans and is "not acceptable." "WAYS OF DOING THIS" Lawmakers last week considered extending government funding at current $988 billion levels until mid-December, but Tea Party Republicans insisted that cuts to Obamacare remain part of the package. Obama will mark the five-year anniversary of the U.S. financial crisis on Monday in an effort to move back to his domestic agenda after weeks of dealing with Syria and how to respond to its use of chemical weapons. The financial crisis was accelerated on September 15, 2008, when the Lehman Brothers firm filed for bankruptcy protection. Obama is expected to focus on the positive, discussing progress made and highlighting his prescriptions for boosting job creation amid budget battles with Republicans. He said he would be willing to talk to House Speaker John Boehner about reversing deep across-the-board spending cuts that went into effect this year through the process known as sequestration, but said Boehner has been an unwilling partner. "There are ways of doing this. It's just that they haven't been willing to negotiate in a serious way on that," Obama said. Obama and Boehner have clashed on repeated occasions over the budget. A standoff over raising the debt limit in 2011 resulted in the first-ever U.S. credit rating downgrade and dealt a setback to the nascent economic recovery. Obama also said he is willing to talk to Republicans about how to accelerate further reductions in the budget deficit. But he pointed out that the deficit has shrunk more quickly than expected, and said that efforts by "a portion of Congress" to push for sharper budget reductions would only worsen the wide gap between rich and poor in the United States. "There's no serious economist out there that would suggest that if you took the Republican agenda of slashing education further, slashing Medicare further, slashing research and development further, slashing investments in infrastructure further, that would reverse some of these trends of inequality," he said. The Congressional Budget Office has said it expects the government's annual deficit to shrink to $642 billion in the fiscal year that ends this month, the first annual deficit below $1 trillion in five years. (Reporting By Mark Felsenthal; Editing by Bill Trott and Christopher Wilson)