9 Oct 2013

Obama warns of dire consequences of continued shutdown

11:38 am on 9 October 2013

The United States president, Barack Obama, has warned of dire national, and international consequences, if the nine day old government shutdown continues.

Some Republican lawmakers say they are not worried about a looming financial crisis if they fail to raise the debt ceiling before the 17 October deadline.

But speaking this morning at the White House, Mr Obama reminded them there were immediate consequences the last time they flirted with the idea of a default, in 2011.

"Business and consumer confidence plunged. America's credit rating was downgraded for the first time.

"And a decision to actually go through with it, to actually permit default, according to many CEOs and economists would be, and I'm quoting here, insane, catastrophic, chaos."

The markets are also warning that even if the US does not technically default on its debt, missing any type of payment would likely damage the economy.

Mr Obama says he remains very hopeful Congress will not put his administration in the position of having to consider prioritising debt payments in the event of a federal debt default.

Mr Obama appealed directly to Republican speaker of the House of Representatives John Boenher to end the political stand-off.

"My suggestion to the speaker has been and will continue to be 'let's stop the excuses, let's take a vote in the House, let's end this shutdown right now, let's put people back to work'.

"There are enough reasonable Republicans and Democrats in the House who are willing to vote 'yes' on a budget that the Senate has already passed.

"That vote could take place today, shutdown would be over."

Mr Obama said the United States had many obligations beyond paying government bills, citing the potential negative international impact on the country's creditworthiness.