Republican challenges Obama on US debt ceiling

The top Republican in the US Senate warned President Barack Obama on Sunday that he is willing to use the debt ceiling as "leverage" to end the administration's "massive spending addiction." Mitch McConnell's remarks set the stage for another round of high-stakes political brinksmanship over the US economy just as jittery markets recover from the tense end-of-year drama over the so-called "fiscal cliff." Obama has warned Republicans against playing a "dangerous game" with the debt ceiling, arguing that raising the $16.4 trillion borrowing limit to pay the country's outstanding bills should not be a political football. If Congress fails to clinch a deal to allow more government borrowing, it risks causing the United States to default on its bills and financial obligations. Republicans are smarting after accepting a deal to avert the fiscal cliff that imposed a tax hike on the richest Americans -- a major concession for conservatives -- but delayed any move on the spending cuts they sought. The measure, signed into law by Obama on Wednesday, dodged across-the-board tax hikes and automatic spending cuts that had threatened to unleash economic turmoil and perhaps drive America back into recession. Republicans will have several more chances to try to get the spending cuts they desire and are already demanding concessions from Democrats on expenditures in return for allowing the debt ceiling to rise. "What I'm willing to say is, if the president won't lead us here in the direction of reducing this massive spending addiction that we have, then we have to use whatever leverage we have," McConnell told CBS's "Face the Nation" program. "And there are some examples of leverage coming along and the debt ceiling is one of them." Obama insists he will not allow a repeat of the 2011 crisis, when the United States came perilously close to defaulting on its debts as Republicans sought deep spending cuts in return for more government borrowing. The United States hit the debt ceiling again on December 31. The Treasury said it would adjust its handling of civil service pensions to keep operating under the borrowing limit without slashing federal spending, suggesting it could do this at least until the end of February. Possible, but desperate, fallout if the debt ceiling is not raised include halting pay to the military and health benefits to the elderly. The political battle over the ceiling in 2011 led to Standard & Poor's cutting the US's top-level AAA credit rating for the first time in history, putting it at AA+ with a "negative" outlook. More opportunities for Republicans to force the spending issue include two months from now when more than $100 billion in automatic cuts that neither side wants are due to kick in after being delayed by the fiscal cliff deal. Obama must also soon seek a continuing resolution to keep government running while the overall federal budget is negotiated.