By Yali N’Diaye

WASHINGTON (MNI) – President Obama Wednesday said there is no need
for Congress to wait until August 2 to increase the debt ceiling and
called for “substantial progress” to be made by the end of this week.

During a news conference, he also reaffirmed that neither
Republicans nor Democrats want to see the country default on its
obligations.

Reiterating comments made earlier Wednesday by Treasury Secretary
Timothy Geithner, Obama brushed aside the idea of the U.S. chosen to
meet some of its obligations and not others, comparing that approach to
someone paying their mortgage but not the car loan.

Obama also addressed the tax issues, repeating that while he wants
to extend tax cuts for the middle class, “millionaires and billionaires”
will have to accept higher tax rates.

“August 2 is a very important date and there is no reason why we
can’t get this done now,” Obama said, referring to the deadline date for
increasing in the statutory debt ceiling.

“There is no point putting it off,” he continued.

“If by the end of this week we have not seen substantial progress,
then I think members of Congress need to understand we are going to
start having to cancel things and stay here until we get it done,” he
warned, noting recess periods will soon start alternating between the
Senate and the House.

“You stay here, let’s get it done,” Obama told Congress, adding,
“At a certain point, they need to do their job.”

For his part, Obama said he has shown his willingness to make some
tough decisions on spending.

“Nobody wants to put the creditworthiness of the United States in
jeopardy,” Obama said. “Nobody wants to see the United States default.”

If the federal government defaults, he said, “then the consequences
for the U.S. economy will be significant, and unpredictable, and that it
not a good thing.”

Obama also opposed the idea of paying down just the interest on the
debt or certain obligations, adding, in a familiar rhetoric, that
today’s debt-related payments are related to past decisions made by
Congress.

So the debt ceiling needs to be raised, he said, sooner rather than
later.

“We’ve got to seize this moment,” Obama said, adding both he and
Vice President Biden will continue the deficit reduction talks “for as
long as it takes.”

Both parties agree on the scale and urgency of the deficit
reduction, Obama pointed out.

That said, he repeated that the objective of a $4 trillion deficit
cut can not be reached just by cutting spending.

“The bottom line,” Obama reiterated, is that “any agreement to
reduce our deficit is going to require tough decisions and balanced
solutions.”

It is also important to understand that deficit and debt reduction
must be part of an overall package for log-term job growth, he said.

Obama added that short-term spending can be justified as long as it
improves the long-term prospects for the economy, hence revenues, noting
that “We can focus on jobs at the same time as we are focusing on debt
and deficit reduction.”

“If there are steps that in the short term may reduce the amount of
cash in the Treasury but in the long term mean that we’re growing at
3.5% instead of 2.5%, then those ideas are worth exploring,” the
president said.

In that regard, “I think that it makes perfect sense for us to take
a look at ‘can we extend the payroll tax (cut) for example an additional
year’.”

While calling for ways to simplify the tax code and reduce related
spending, Obama reiterated the different objectives for the wealthier
and the middle class.

He repeated his willingness to extend tax cuts for the middle
class, while the wealthy — which he described as millionaires,
billionaires, corporate jet owners and oil companies — will have to let
go of some tax benefits.

** Market News International Washington Bureau: 202-371-2121 **

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