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Sunday
Jan022011

Goolsbee Warns Tea Party: Don't 'Play Chicken' With Debt Ceiling Vote

Photo Courtesy - ABC News(WASHINGTON) -- President Obama's top economic advisor, Austan Goolsbee, warned Sunday against "playing chicken" with raising the country's debt ceiling, saying it would cause "a worse financial economic crisis than anything we saw in 2008."

"This is not a game. The debt ceiling is not something to toy with," said Goolsbee, the chairman of the White House Council of Economic Advisers, in an interview with ABC’s This Week.

"If we hit the debt ceiling, that's ... essentially defaulting on our obligations, which is totally unprecedented in American history," he said. "The impact on the economy would be catastrophic."

Congress raised the debt ceiling to $14.3 trillion last February, but the federal debt is now at $13.9 trillion, meaning the ceiling will need to be raised again this spring to avoid pushing the country into default.

Some conservatives in Congress, especially new Tea Party members, have said they will vote against raising the debt limit again, saying government should drastically cut spending instead. Incoming Republican House Speaker John Boehner has said he will work to convince new members to vote to raise the limit, saying it will be "the first really big adult moment" for the new Republican majority.

Goolsbee said Obama will propose "tough choices" on tackling the nation's spending and deficit problems in his soon-to-be released budget for the next fiscal year.

After more than two years of economic turmoil, 2010 ended with glimmers of positive news for the economy. Holiday sales were up 5.5 percent over 2009, beating expectations. Stocks were also headed in the right direction, with the Dow ending the year up 11 percent and the Nasdaq almost 17 percent. But the unemployment rate has remained stuck at 9.8 percent, only slightly better than it was at this time last year.

"Coming out of the worst financial crisis of our lifetimes, it's always a messy, bumpy road to get out of that," Goolsbee said. "You're starting to see encouraging signs, I'd say.”

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