By BEN FELLER, AP White House Correspondent
CHICAGO (AP) - President Barack Obama confidently predicted Friday that a divided Congress would raise the nation's borrowing limit to cover the staggering federal debt rather than risk triggering a worldwide recession, but he conceded for the first time he would have to offer more spending cuts to Republicans to get a deal.
Pushed to the brink, Obama said, the two parties would find "a smart compromise."
In an interview with The Associated Press, Obama also took pains to promote his long-term plan to cuts trillions of dollars from federal deficits as a fairer, more compassionate alternative to a Republican plan that surged to party-line passage Friday afternoon in the House.
And Obama said in his most forceful terms yet that he had the economic record to win reelection after he had "been able to yank this economy" out of recession.
One week after the near government shutdown, the rejuvenated president answered questions in his hometown after an evening of fundraising for his reelection bid and a rare night in his own bed.
On America's wars, he said that a significant number of troops would begin coming home from Afghanistan in July despite expectations that the withdrawal could be modest. He said the United States would not expand its military role to end a bloody stalemate in Libya but insisted that Moammar Gadhafi would, in time, be forced from power.
While the House approved the multitrillion-dollar deficit-cuts measure, it was Obama's comments on the debt limit -- an issue the White House has labored to keep separate from yearly red ink totals -- that altered the debate of the day.
The government is nearing its borrowing limit of $14.3 trillion and risks going into a crippling default. Seizing on public frustration about spending, House Republicans say they won't lift the debt cap without more cuts.
Obama told the AP without doubt: "We will raise the debt limit. We always have. We will do it again."
He warned that anything less would undermine the solvency of the government, roil financial markets and potentially "plunge the world economy back into a recession." Yet when pressed on how the stalemate with House Speaker John Boehner would end, Obama said: "I think he's absolutely right that it's not going to happen without some spending cuts."
The president spoke in the context of his goal that Democratic and Republican lawmakers can agree on a framework for long-term deficit reduction within the next couple of months. That falls within about the same time frame that Congress will need to vote to lift the debt ceiling. The administration says the latest Congress could act on that is by early July.
When asked if he thought the perilous stakes alone would cause Republicans to give in, Obama said: "Well, no, I don't expect the Republicans to give in and I get 100 percent of my way, and I don't expect that we're going to give 100 percent of what the Republicans want. I think what we want to do is make sure that we have a smart compromise that is serious."
A Boehner spokesman, Brendan Buck, welcomed Obama's willingness to connect the debt limit to broader reductions in spending, saying that is what the American people want. "It's encouraging he may now be getting that message," Buck said.
Later, Obama spokesman Jay Carney sought to pull back a bit on the president's remarks. Carney said Obama was acknowledging that more deficit cuts are needed but insists the debt ceiling vote cannot be contingent on upcoming negotiations.
In the 25-minute interview, Obama underlined his vision and reelection campaign message about the country's path. He said he shares the Republicans' desire for fiscal restraint but stands alone in protecting the social compacts and priorities of a nation. Elaborating on his description of a Republican "pessimistic vision," he said: "It's one that says that America can no longer do some of the big things that made us great, that made us the envy of the world."
On Afghanistan, where the United States has 100,000 troops, Obama offered a somewhat aggressive assessment of the scope of the troop withdrawal that is to begin as he promised in July. The goal is to transfer responsibility to Afghan forces.
Without estimating a number of U.S. troops that will return, Obama said, "I'm confident that the withdrawal will be significant. People will say this is a real process of transition; this is not just a token gesture."
The president's stance on Libya comes as Gadhafi's troops have relentlessly attacked rebel positions as part of a deadlocked internal war sparked two months ago. The international community stepped in with airstrikes a month ago, but the United States recently stepped back into a support role and questions abound about the mission's success.
"I'm actually very impressed with the performance of NATO so far," Obama said in rejecting any increased U.S. role.
The president himself described the conflict as a stalemate on the ground but said Gadhafi is being "squeezed."
"He's running out of money. He is running out of supplies," Obama said. "The noose is tightening, and he is becoming more and more isolated. And my expectation is, is that if we continue to apply that pressure and continue to protect civilians, which NATO is doing very capably, then I think over the long term, Gadhafi will go and we will be successful."
On terrorism, the president declined to guarantee that the Guantanamo Bay prison camp would close during his presidency. He had once promised to shut the facility within a year of taking over the job.
He conceded he does not have the support of Congress on that issue and has not been able to overcome fears of bringing some detainees into the United States for trial. "It's my job to give people some assurance that we can handle this effectively, and obviously I haven't been able to make the case right now," he said. "That doesn't mean I stop making the case."
To win a second term, Obama must convince a nation still saddled with high joblessness and a fragile economic recovery that he has overseen a period of progress -- and that more is on the way. Obama said he's got a record he can sell: Wall Street regulation, a health care insurance overhaul and efforts to make college more affordable.
"I think I'm going to be able to make an effective case that given the extraordinary circumstances that I inherited when I came in -- the worst recession since the Great Depression -- that not only have I been able to yank this economy out of that hole and get it back on a track to growth," he said.
The 2012 presidential race is the first in which the Tea Party coalition, which rails against the growth of government and assails much of the Obama presidency, will play a major role. The president took an upbeat role of such a movement: "Anytime the American people are actively engaged in the political process, it's good."
(Copyright 2011 by The Associated Press. All Rights Reserved.)