President Obama signaled Saturday that he wouldn't accept the Republicans' offer for a short-term increase in the nation's debt limit.
"Because damage to America’s sterling credit rating wouldn’t just cause global markets to go haywire; it would become more expensive for everyone in America to borrow money. Students paying for college. Newlyweds buying a home," he said.
House Republicans have offered a six-week increase in the debt limit. If adopted, the plan will buy time for broader negotiations over entitlement spending and taxes, they say.
Obama claimed that the damage to interest rates from failing to pass a long-term debt ceiling hike would create a "Republican default tax" on families and businesses.
"Manufacturing crises to extract massive concessions isn’t how our democracy works, and we have to stop it," Obama said. "Politics is a battle of ideas, but you advance those ideas through elections and legislation – not extortion."
The United States will hit the debt ceiling and begin defaulting on its bills on Thursday, according to the Treasury Department.