Obama Warns Debt Fight to Weaken U.S. Standing in WorldMargaret Talev
President Barack Obama said the partial government shutdown and threat of default is hurting U.S. credibility around the world, undercutting work on a trade pact with Asia-Pacific nations and emboldening China in areas in which it disagrees with the U.S.
“Already this week, I had to miss critical meetings in Asia to promote American jobs and businesses,” Obama said today at a White House news conference as he urged Congress to fund federal operations and raise the nation’s $16.7 trillion debt ceiling before Oct. 17 so the government can pay its bills.
“I’m sure the Chinese don’t mind that I’m not there right now in the sense that, you know, there are areas where we have differences and they can present their point of view and not get as much of a push back,” he said.
China and Japan, which together hold more than $2.4 trillion in U.S. Treasuries and whose leaders attended the Asian economic summit that Obama missed, are raising pressure on the U.S. to resolve the impasse on the debt limit.
A U.S. default would be a blow to the global economy and cause China and Japan, the second and third largest economies after the U.S., to take losses on their foreign reserves.
“Obviously, my message to the world is, the United States always has paid its bills, and it will do so again,” Obama said. “But, I think, they’re not just looking at what I say, they’re looking at what Congress does.”
Being forced to cancel his four-nation trip this week because of the budget standoff with congressional Republicans is akin to “not showing up to my own party,” Obama said, and “makes it look like we don’t have our act together.”
Obama planned to use the Asia-Pacific Economic Cooperation summit in Bali, Indonesia, yesterday and today to help resolve outstanding issues on a proposed 12-nation Trans-Pacific Partnership trade accord, which the U.S. was striving to conclude by year’s end.
Rintaro Tamaki, deputy secretary general at the Organization for Economic Cooperation and Development, said in an interview in Brunei yesterday that Obama’s absence from the APEC meeting may slow progress on the trade deal.
“This may lose momentum to reach agreement by the end of the year,” said Tamaki, a former top currency official at Japan’s Ministry of Finance.
“It didn’t help that I wasn’t there to make sure that we went ahead and closed a trade deal that would open up markets and create jobs for the United States,” Obama said. “I should have been there.”
Secretary of State John Kerry stood in for Obama at the meeting, which also was attended by Chinese President Xi Jinping and Japan’s Prime Minister Shinzo Abe.
Obama also is missing an Association of Southeast Asian Nations summit in Brunei, where China’s territorial disputes in the region may dominate talks.
Attendance at both summits were part of Obama’s strategy to bolster U.S. influence in a region that represents more than half of the global economy.
Kerry told reporters in Bali that Congress should think carefully about the message it is sending to other nations with the shutdown.
“If it were prolonged, or it were repeated,” he said, the world would begin “to question the willingness of the United States to stay the course -- or its ability” to do so.
Obama said such meetings are how business gets done.
“In the same way that a CEO of a company, if they want to close a deal, aren’t gonna do it by phone,” he said. “They want to show up and look at somebody eye-to-eye and tell ’em why it’s important and shake hands on a deal. The same thing is true with respect to world leaders.”