US President Barack Obama
President Barack Obama will renew his case for tax hikes on wealthy Americans to avert a year-end fiscal crunch and call for a smooth increase in the nation's borrowing limit in a speech to a business group on Wednesday, a White House official said.
The president is embarked on an aggressive campaign to pressure congressional Republicans to compromise on steps to avoid the so-called fiscal cliff. He will argue to corporate executives that it would hurt the nation's economy to have another protracted political fight over raising the debt limit, the official said.
"The President will highlight why it would hurt our economy and our nation's businesses if we do not find a solution to avoid another debt ceiling crisis, and will ask the business leaders for their help in supporting an approach that resolves the debt limit without drama or delay," said the official, who spoke on condition of anonymity.
It was the reluctance of congressional Republicans to agree to such an increase in 2011 without deep spending cuts that brought the nation to the brink of default. The result was a historic lowering of the U.S. credit rating and a setback to the recovery from a recession that ended in 2009, reports Reuters.
The statutory ceiling on U.S. Treasury borrowing is $16.4 trillion. The nation is expected to hit the legal limit near the year's end, although it can tap emergency measures to stave off a default and keep the government running into early 2013.
If Congress fails to raise the borrowing cap, analysts expect the Treasury would run out of options to avoid a default sometime in the latter half of February. That forecast could change depending on how the administration and Congress deal with the fiscal cliff at the end of the year.
Obama is due to deliver remarks to the Business Roundtable, an association representing chief executives of large U.S. firms, at 10:50 a.m. (1550 GMT).
The president and congressional Republicans are currently battling over how to avoid automatic tax increases and deep spending cuts. The president wants to extend expiring tax cuts for all but the wealthiest Americans while Republican leaders are dug in against allowing any taxes rises at all.
The president will renew his insistence that taxes rise on the most affluent Americans in his speech to the business group, the White House official said.
If the administration and lawmaker remain at loggerheads, going over the fiscal cliff is projected to throw the weak economy back into recession.