By Meghashyam Mali - 12/05/12 12:40 PM EST
President Obama will appeal to business leaders on Wednesday, calling on them to press lawmakers to raise the U.S. debt limit during “fiscal cliff” negotiations.
Obama, who will meet with executives from the Business Roundtable on Wednesday, hopes to avoid another protracted fight over the debt ceiling and has sought to include it in ongoing deficit talks.
The Treasury will hit the $16.4 trillion borrowing limit by the end of the year, but administration officials say “extraordinary measures” could be implemented to delay raising the limit until early 2013.
The White House and Congress are negotiating a deficit-reduction package to avoid rising tax rates and automatic spending cuts set to take effect in January, and the president has sought to include the debt limit in a final deal.
The president’s initial deficit offer included a measure that would allow him to raise the debt limit as needed. Congress could only block such a move by a two-thirds resolution.
Democrats have defended the proposal, saying that another standoff in early 2013 over the nation’s borrowing limit could spook markets and weaken the economic recovery.
Republicans, however, dismissed the idea and believe giving Obama the power to raise the limit would cost them leverage in talks and remove a key lever against government spending. The House GOP deficit counteroffer earlier this week did not include measures for raising the ceiling, but reports suggest Republicans are willing to negotiate over the issue.
Business groups have pushed for both sides to include the debt ceiling in cliff negotiations, hoping to avoid economic uncertainty.
In 2011, congressional Republicans and the president engaged in a protracted fight over raising the limit, finally reaching an agreement hours before the government would have run out of money. But the political turmoil led to a downgrade of the nation’s credit rating.
That fight also led to the creation of the “supercommittee” of House and Senate lawmakers who failed to find $1.2 trillion in deficit cuts, leading to the automatic cuts taking effect in 2013, which Washington now hopes to avoid.
Obama’s meeting with business leaders it the latest effort to rally public support as both sides seek a deficit deal. Last month, Obama met with top CEOs from some of the nation’s largest companies to explain his stance in talks.
The president is pushing for a plan to raise tax rates on the wealthy, but Republicans oppose that move, instead calling for extending the expiring Bush-era tax rates across the board.