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After Debt Battle, Obama Says Washington Must Change

U.S. President Barack Obama speaks about the reopening of the U.S. government at the White House in Washington D.C. on October 17.
U.S. President Barack Obama says politicians in Washington must change how they do business.

Speaking the morning after the passage of legislation that narrowly averted a debt default, Obama said "the American people are completely fed up with Washington."

Obama also lashed out at Republicans for making the U.S. government "dysfunctional."

"Let's work together to make government work better instead of treating it like an enemy," he said. "We are purposefully making it work worse. That's not what the founders of this nation envisioned when they gave us the gift of self-government."

Congress passed legislation to end a bruising, partisan battle over whether to raise the U.S. federal debt limit just hours before the midnight deadline when the government was to reach its $16.7 trillion debt ceiling and run out of funds to pay creditors.

The U.S. Treasury Department had warned of potentially "catastrophic" consequences for the nation's economy in the event of a default, which would also have sent shockwaves through financial markets around the world.

Obama was speaking at the White House before an audience of federal workers who had been forced to stay home during a 16-day partial government shutdown also caused by political divisions over budget issues.

Hundreds of thousands of U.S. government employees were told to return to their jobs on October 17.

The U.S. president said that while the country had emerged from the crisis with "the full faith and credit of the United States remain[ing] unquestioned," it was too soon to tell the extent of the "completely unnecessary damage on our economy."

The International Monetary Fund and World Bank have welcomed the resolution to the budget crisis, as has China, the United States' top creditor.

But Obama indicated that the reputation of the United States must recover from a significant hit.

"Probably nothing has done more damage to America's credibility in the world, our standing with other countries, than the spectacle that we've seen these past several weeks," he said. "It's encouraged our enemies, it's emboldened our competitors, and it's depressed our friends who look to us for steady leadership."

Obama also reiterated his call for bipartisan cooperation to reach agreement on a long-term budget, reforming the country's immigration system, and passing a farm bill.

Budget negotiators kicked off a new round of talks on October 17 to try to bridge the vast gulf between Republican and Democratic fiscal priorities.

While many in Washington expressed relief that default has been averted, they also pointed to another potential budget crisis looming on the horizon.

That's because the new legislation passed by Congress provides only a short-term solution. It restores government funding only through January 15 and extends the government’s borrowing authority only through February 7.

Analysts say that without a new spirit of cooperation in Washington, lawmakers could be embroiled in a similar standoff early in 2014.

Republicans had held up raising the debt limit with demands to change Obama’s health-care reforms, which had already been passed into law.

"Obamacare" survived the crisis unscathed, but Republicans have vowed they will continue to make the law an issue in upcoming budget debates.

It is unclear to what extent Republican lawmakers will look to use the debt ceiling as leverage, however, after taking a hit in public opinion polls during the recent crisis.

Concern over future battles appeared to dampen market gains that followed news of the deal in Washington on October 16.

With reporting by Reuters, AP, and AFP
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