Obama says US will bounce back from shutdown, debt crisis

WASHINGTON (ICIS)–The US government and the nation’s economy will bounce back from negative effects of the federal shutdown and debt limit crisis, President Barack Obama said on Thursday, as he assured other nations that “the full faith and credit of the United States is not threatened”.

In a speech at the White House just hours after he signed a bill to restore federal spending authority and raise the debt limit, Obama said the shutdown was “another self-inflicted crisis that has set our economy back”.

The weeks-long crisis, he said, “has slowed our nation’s growth, as consumers cut back on spending, and company CEOs have said that the shutdown has set back their plans to hire over the next six months”.

“Just the threat of default has increased our borrowing costs,” he said.

“But we will bounce back from this,” Obama said. “The US economy remains the bedrock of the world economy, and today I want the world to know that the full faith and credit of the United States is not threatened.”

He called for better cooperation between those in the Republican-majority House of Representatives and Democrat-majority Senate.

“All my friends in Congress understand that how business is done in this town has to change,” he said.

Obama said there are three areas where Democrats and Republicans can make progress in months ahead.

First, he urged Congress to pursue “a balanced approach to a responsible federal budget that will grow the economy and shrink the long-term deficit”. 

“We need both fiscal responsibility and growth,” he said.

Second, he said he wants to work with Congress to complete a comprehensive reform of the nation’s immigration laws, and, third, he urged speedy action by the legislature in passing a new farm bill.

Those three goals can be achieved by the end of this year, he said.

Getting those three major items through Congress in little more than two months – which include the major US holidays of Thanksgiving and Christmas – would be a tall task by any measure.

Obama may be anxious about getting those and other policy objectives enacted before the end of this year because 2014 is an election year, a time when members of Congress typically are reluctant to make decisions on any controversial bills or issues for fear such votes will hurt them at the polls on election day.

On 4 November next year, every member of the House and one-third of senators will be facing re-election.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy