Obama Warns of Crisis unless Debt Ceiling is Raised

President Barack Obama warned of a new economic crisis Monday and said global stock markets would go "haywire" unless Republicans in Congress agree to raise the U.S. sovereign debt ceiling.

"To even entertain the idea of this happening, of the United States of America not paying its bills, it is irresponsible, it is absurd," Obama said in repeating his demand for a debt limit rise.

"We are not a deadbeat nation," the president said in his final press conference of his first White House term.

"While I'm willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they've already racked up."

Congressional refusal to raise the debt limit beyond its current level of $16.4 trillion could delay payment of Social Security checks and veterans benefits, paychecks to troops, air traffic controllers, and the honoring of contracts with small businesses.

"Investors around the world will ask if the United States of America is in fact a safe bet," he added.

"Markets could go haywire, interest rates would spike for anybody who borrows money.... It would be a self-inflicted wound on the economy."

The United States is expected to run up against its current debt limit by the end of February, and Obama lay any potential solution at the foot of the Republican House leadership, some of whom have demanded that any rise in the debt ceiling be matched dollar-for-dollar by deep government spending cuts.

"They can act responsibly, and pay America's bills, or they can act irresponsibly and put America through another economic crisis," Obama said.

"But they will not collect a ransom in exchange for not crashing the American economy."

Obama's blunt warning came amid reports that Republicans in the House of Representatives are considering letting the U.S. government go into default unless Obama agrees to dramatic federal spending cuts.