Tensions Ratchet Up in Debt Battle

President Presses GOP, Floats Short-Term Borrowing Increase, but Boehner Balks Without Deficit Talks.

President Barack Obama warned Tuesday of “economic chaos” if a political stalemate causes the U.S. to no longer be able to pay its bills, and said he would accept even a short-term increase in the borrowing limit to give lawmakers time to negotiate.

Mr. Obama’s comments underscored rising concern at home and abroad, including in financial markets, that the U.S. could default on its financial obligations should the standoff continue through next week. The remarks were intended to pressure Republicans to pass bills to raise the debt ceiling and to fully reopen the federal government without GOP policy demands attached.

House Speaker John Boehner (R., Ohio) quickly shot down the idea of a short-term reprieve that excludes Republican priorities, saying any increase in the nation’s statutory borrowing limit must be paired with deficit-reduction measures.

“What the president said today was, if there’s unconditional surrender by Republicans, he’ll sit down and talk to us,” Mr. Boehner said after Mr. Obama held a news conference at the White House.

“We can’t raise the debt ceiling without doing something about what’s driving us to borrow more money and to live beyond our means,” the speaker said.

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