White House to GOP: Don't Play With Dynamite on Debt
The White House warned Friday that Congress should avoid "playing with dynamite" in what's shaping up as the next "cliff" battle -- increasing the nation's debt ceiling.
"It is quite clear that the economy will be better if Congress does its job and does what it routinely has done historically which is raise the debt limit without problem," Alan Krueger, chairman of the White House Council of Economic Advisers, said in an interview on Bloomberg television.
Speaking just days after President Barack Obama and lawmakers settled the hard-fought "fiscal cliff" deal to avert tax hikes and spending cuts, he warned a battle on borrowing costs and the budget might lead the U.S. to risk a credit downgrade.
"I think we really are playing with dynamite with the debt ceiling," Krueger said in a separate interview on MSNBC.
"Just go back to August 2011, we saw confidence plunge when Congress played Russian roulette with the debt ceiling. We saw job growth grind to almost a halt. So the economy will certainly do better if Congress does what it normally does, which is raise the debt ceiling without drama."
After being sworn to a second term as House speaker, Rep. John Boehner implored the new Congress on Thursday to tackle the nation's heavy burden of debt at long last. "We have to be willing -- truly willing -- to make this right."
. "The American dream is in peril," he said. (Read More: Boehner Re-Elected Speaker as New Congress Convenes)
On Capitol Hill on Friday, Boehner told the House GOP caucus that House Republicans in March will use the debt limit as leverage to cut spending and reform entitlements, a source in the room told NBC News.
"With the cliff behind us, the focus turns to spending," Boehner said, according to the source. "The president says he isn't going to have a debate with us over the debt ceiling. He also says he's not going to cut spending along with the debt limit hike."
At a news conference, House Democratic leader Nancy Pelosi said Democrats have not said "no" to spending cuts. "We agreed to over a trillion in cuts [but] cuts in education are false economy ... and reduce the possibilities for growth," she said.