Obama: Congress will compromise, raise debt limit

[April 16, 2011]  CHICAGO (AP) -- President Barack Obama, insisting a politically divided government will not risk tanking the world economy, says Congress will once again raise the amount of debt the country can pile up to ensure it has money to pay its bills. For the first time, though, he signaled that he will have to go along with more spending cuts to ensure a deal with Republicans.

In an interview Friday with The Associated Press, the president also spoke in his most confident terms yet that voters will reward him with another four years in the White House for his work to turn around the economy. Speaking from his hometown and the site of his newly launched re-election bid, Obama said he thinks voters will determine he is the best prepared person "to finish the job."

On America's wars, he said that a significant number of troops would begin coming home from Afghanistan in July despite many expectations that the withdrawal would be modest. He said the U.S. would not expand its military role to end a bloody stalemate in Libya but insisted that Moammar Gadhafi would, in time, be forced from power.

Appearing rejuvenated from spending time and raising some political cash in his hometown, Obama was just a week removed from a marathon showdown with House Republicans that almost led to a government shutdown. He signed the budget bill to avoid the embarrassing stoppage of government services when he got back to the White House later on Friday.

As Washington's political leaders scramble to show leadership on the suddenly consuming debt debate, Obama made sure in the interview to promote his long-term plan to cut trillions of dollars as the fairer, more compassionate alternative to a Republican plan that surged to party-line passage Friday afternoon in the House. Yet it was his comments on the debt limit -- an issue the White House has labored to keep separate from the broader discussion on how to rein in spending -- that altered the course of the conversation.

The government is nearing its borrowing limit of $14.3 trillion and risks going into a crippling default.

Seizing on public frustration about spending, House Republicans say they won't lift the debt cap without more cuts.

Obama told the AP without doubt: "We will raise the debt limit. We always have. We will do it again."

He warned that anything less would undermine the solvency of the government, roil financial markets and potentially "plunge the world economy back into a recession." Yet when pressed on how the stalemate with House Speaker John Boehner would end, Obama said: "I think he's absolutely right that it's not going to happen without some spending cuts."

The president spoke in the context of his goal that Democratic and Republican lawmakers can agree on a framework for long-term deficit reduction within the next couple of months. That falls within about the same time frame that Congress will need to vote to lift the debt ceiling. The administration says the latest Congress could act on that is by early July.

Asked if he thought the perilous stakes alone would cause Republicans to give in, Obama said: "Well, no, I don't expect the Republicans to give in and I get 100 percent of my way, and I don't expect that we're going to give 100 percent of what the Republicans want. I think what we want to do is make sure that we have a smart compromise that is serious."

A Boehner spokesman, Brendan Buck, welcomed Obama's willingness to connect the debt limit to broader reductions in spending, saying that is what the American people want. "It's encouraging he may now be getting that message," Buck said.

Later, Obama spokesman Jay Carney sought to pull back a bit on the president's remarks. Carney said Obama was acknowledging that more deficit cuts are needed but insists the debt ceiling vote cannot be contingent on upcoming negotiations.

In the 25-minute interview, Obama underlined his vision and re-election campaign message about the country's path. He said he shares the Republicans' desire for fiscal restraint but stands alone in protecting the social compacts and priorities of a nation. Elaborating on his description of a Republican "pessimistic vision," he said: "It's one that says that America can no longer do some of the big things that made us great, that made us the envy of the world."

On Afghanistan, where the United States has 100,000 troops, Obama offered a somewhat aggressive assessment of the scope of the troop withdrawal that is to begin as he promised in July. The goal is to transfer responsibility to Afghan forces.

Without estimating a number of U.S. troops who will return, Obama said, "I'm confident that the withdrawal will be significant. People will say this is a real process of transition; this is not just a token gesture."

The president's stance on Libya comes as Gadhafi's troops have relentlessly attacked rebel positions as part of a deadlocked internal war sparked two months ago. The international community intervened with airstrikes a month ago, but the U.S. recently stepped back into a support role and questions abound about the mission's success.

"I'm actually very impressed with the performance of NATO so far," Obama said in rejecting any increased U.S. role.

The president himself described the conflict as a stalemate on the ground but said Gadhafi is being "squeezed."

"He's running out of money. He is running out of supplies," Obama said. "The noose is tightening, and he is becoming more and more isolated. And my expectation is, is that if we continue to apply that pressure and continue to protect civilians, which NATO is doing very capably, then I think over the long term, Gadhafi will go and we will be successful."

On terrorism, the president declined to guarantee that the Guantanamo Bay prison camp for terrorist suspects would close during his presidency. He had once promised to shut the Navy-run facility in Cuba within a year of taking over the job.

He conceded he does not have the support of Congress on that issue and has not been able to overcome fears of bringing some detainees into the United States for trial. "It's my job to give people some assurance that we can handle this effectively, and obviously I haven't been able to make the case right now," he said. "That doesn't mean I stop making the case."

To win a second term, Obama must convince a nation still saddled with high joblessness and a fragile economic recovery that he has overseen a period of progress -- and that more is on the way. Obama said he's got a record he can sell: Wall Street regulation, a health care insurance overhaul and efforts to make college more affordable.

"I think I'm going to be able to make an effective case," he said. The president said that it has been under his watch that the country went from a staggering recession into steady progress and that "I have been able to yank this economy out of that hole and get it back on a track to growth."

The 2012 presidential race is the first in which the tea party coalition, which decries the growth of government and assails much of the Obama presidency, will play a major role. The president took an upbeat role of such a movement: "Anytime the American people are actively engaged in the political process, it's good."

[Associated Press; By BEN FELLER]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.