Markets have had a muted response to the government shutdown that began on Tuesday. But President Obama, in an interview with CNBC, warned that the economic effects of political gridlock could grow far worse if Congress fails to raise the debt ceiling by Oct. 17, leaving the country at risk of defaulting on its borrowing. “This time is different,” he said, adding that Wall Street “should be concerned.”
Mr. Obama and Vice President Joseph R. Biden Jr.met on Wednesday with Wall Street chieftains, including Lloyd C. Blankfein, the chief executive of Goldman Sachs. “I told them that it is not unusual for Democrats and Republicans to disagree,” Mr. Obama recalled in the CNBC interview. “But when you have a situation in which a faction is willing potentially to default on U.S. government obligations, then we are in trouble. If they’re willing to do it now, they’ll be willing to do it later.”
Economists and investors are quietly exploring the options the White House might have in the event Congress fails to act, The New York Times writes. “The most widely discussed strategy would be for President Obama to invoke authority under the 14th Amendment and essentially order the federal government to keep borrowing, an option that was endorsed by former President Bill Clinton during an earlier debt standoff in 2011.”
Reported By New York Times
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