Bernanke and Obama call for debt limit hike

Ben Southwood
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US PRESIDENT Barack Obama and Federal Reserve chairman Ben Bernanke yesterday joined forces to mount an assault on Republican plans to use the debt ceiling as a bargaining tool.

Obama said there would be no spending cuts in exchange for a hiked debt limit, while Ben Bernanke likened refusing to raise the debt limit to refusing to pay credit card bills, and warned that brinkmanship could hurt the US credit rating.

“If the goal is to make sure that we are being responsible about our debt and our deficit, I’m happy to have that conversation,” Obama said in a press conference.

“What I will not do is have that negotiation with a gun at the head of the American people.”

Bernanke said: “Not raising the debt ceiling is like a family, which is trying to improve its credit rating saying, oh, I know how we can save money, we won’t pay our credit card bills.”

This comes as Republicans in the House of Representatives are demanding spending cuts to match any increase in the debt ceiling, after a fiscal cliff deal that imposed increases in taxes with fewer cuts to rein in US spending, which is viewed by most analysts as the root cause of the deficit problem.