Obama to ask business leaders to push Congress to raise debt limit

Obama to ask business leaders to push Congress to raise debt limit

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By Steve Holland

WASHINGTON (Reuters) - President Barack Obama will appeal to business leaders on Wednesday to urge Congress to approve an increase in the U.S. debt limit and avoid a default that is possible as early as mid-October.

Obama is to address the Business Roundtable as part of a renewed push to focus on domestic budget and economic issues after a month dominated by foreign policy.

The U.S. Treasury is expected to exhaust measures to avoid exceeding the $16.7 trillion debt limit as soon as mid-October. If the cap is not raised, the United States will not be able to pay all of its bills and would go into default.

Obama will tell business leaders that they should pile pressure on Congress, which must vote to increase U.S. borrowing capacity, to avoid a default.

Republicans in the House of Representatives last week considered a plan to tie raising the debt limit to withholding funds for Obama's signature healthcare overhaul, but put off a vote because the party's most fiscally conservative members felt the plan lacked teeth.

It is possible that a federal government shutdown and debt default could result from the budget standoff, although such an outcome has been avoided in past spending battles.

A White House official said Obama "will ask the business community to help send the message to Congress that a default would be disastrous for our economy and for businesses across the country."

"Many reasonable Republicans have said it would be reckless and irresponsible to use the threat of default as a bargaining chip, but some of the extreme members of the Republican Party continue to threaten the full faith and credit of the United States government," the official said.

Obama has warned he will not negotiate over the debt limit.

Brendan Buck, spokesman for House Speaker John Boehner, the top Republican in Washington, said Republicans are not threatening a debt default.

"The president only uses these scare tactics to avoid having to show the courage needed to deal with our debt crisis. Every major deficit deal in the last 30 years has been tied to a debt limit increase, and this time should be no different," Buck said.