"If Congress refuses to raise what is called the debt ceiling, America would not be able to meet all of our financial obligations for the first time in 225 years," said President Obama.
He is once again urging Congress to raise it because as bad as the shutdown is, the President, along with economists warn failing to raise the debt ceiling would be infinitely worse.
At a local level, the government would start withholding payments to ensure they meet their debt obligations. This means they would put a stop to security payments, Medicaid and Medicare and women and children programs. Additionally, interest rates will spike across the board whether buying a home, a car, or receiving student loans. But, there is still time to avoid these possibilities.
"The United States government has so far never defaulted on it's debt, and the hope is that good sense will prevail and that they will raise the debt ceiling before it's too late," said Mervin Jebaraj, a researcher at the University of Arkansas Center for Business and Economic Research.
This issue has been on the books since the last time the government raised the debt ceiling, but fixing the problem could be tricky during this shutdown with so many vital employees furloughed.
President Obama said he is willing to talk about anything, even his health care law, but Republicans have to end the government shutdown first. The President declared Wednesday he will sit for negotiations over the federal budget as well as his health care law, if House Speaker John Boehner will pass legislation re-opening the government and extending the debt ceiling for just a few months or even a few weeks.
"The President said today was if there was an unconditional surrender by Republicans, he'll sit down and talk to us. That's not the way our government works," said Boehner.