Obama: US 'almost out of time' in debt crisis
Source: Agencies |
July 30, 2011, Saturday
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Print Edition
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WITH four days remaining until the United States hits its debt limit, US President Barack Obama told deeply divided Republicans and Democrats yesterday to stop bickering and find a way "out of this mess."
Obama said a deficit-reduction plan being advanced by the top Republican in Congress would be defeated in the Democratic-led Senate and was simply wasting time. He called for compromise and said both parties were not that far apart on spending cuts.
"There are plenty of ways out of this mess but we are almost out of time," he said, warning that the country's credit rating was at risk.
The US will be unable to borrow money to pay its bills if Congress does not raise the debt limit by Tuesday. That could result in an unprecedented default that could push the already fragile economy back into recession.
Fears about the health of America's economy multiplied yesterday after a government report showed weaker-than-expected growth in the second quarter, raising the risk of recession.
Obama spoke as Republican leaders scrambled to rescue their debt plan, which was thrown into doubt on Thursday when some conservatives refused to back their leader's legislation.
House of Representatives Speaker John Boehner's failure to round up enough support exposed a rift in the Republican Party that could complicate efforts to reach a compromise to raise the US debt ceiling before Tuesday's deadline.
World leaders have been stunned by the dysfunction in Washington that has led the US to the brink of default. World Bank President Robert Zoellick said the US was playing with fire.
America's largest foreign creditor, China, has repeatedly urged Washington to protect its dollar investments and its state-run news agency said the US had been "kidnapped" by "dangerously irresponsible" politics.
Investors had been betting for weeks that Washington would raise the debt limit in time, but with the deadline now just four days away, markets are getting rattled.
The US dollar plunged to all-time lows against the safe haven Swiss franc yesterday due to debt worries and poor economic growth. In short-term lending markets, investors dumped holdings over fears about the talks, driving rates on Treasury debt that matures in August to six-month highs.
The House inaction prompted Senate Majority Leader Harry Reid, a Democrat, to warn that the country could not wait any longer and he vowed to take steps to move legislation in the Senate.
He called on Senate Republican leader Mitch McConnell to work with him on a compromise bill that could be enacted before the deadline.
Obama said a deficit-reduction plan being advanced by the top Republican in Congress would be defeated in the Democratic-led Senate and was simply wasting time. He called for compromise and said both parties were not that far apart on spending cuts.
"There are plenty of ways out of this mess but we are almost out of time," he said, warning that the country's credit rating was at risk.
The US will be unable to borrow money to pay its bills if Congress does not raise the debt limit by Tuesday. That could result in an unprecedented default that could push the already fragile economy back into recession.
Fears about the health of America's economy multiplied yesterday after a government report showed weaker-than-expected growth in the second quarter, raising the risk of recession.
Obama spoke as Republican leaders scrambled to rescue their debt plan, which was thrown into doubt on Thursday when some conservatives refused to back their leader's legislation.
House of Representatives Speaker John Boehner's failure to round up enough support exposed a rift in the Republican Party that could complicate efforts to reach a compromise to raise the US debt ceiling before Tuesday's deadline.
World leaders have been stunned by the dysfunction in Washington that has led the US to the brink of default. World Bank President Robert Zoellick said the US was playing with fire.
America's largest foreign creditor, China, has repeatedly urged Washington to protect its dollar investments and its state-run news agency said the US had been "kidnapped" by "dangerously irresponsible" politics.
Investors had been betting for weeks that Washington would raise the debt limit in time, but with the deadline now just four days away, markets are getting rattled.
The US dollar plunged to all-time lows against the safe haven Swiss franc yesterday due to debt worries and poor economic growth. In short-term lending markets, investors dumped holdings over fears about the talks, driving rates on Treasury debt that matures in August to six-month highs.
The House inaction prompted Senate Majority Leader Harry Reid, a Democrat, to warn that the country could not wait any longer and he vowed to take steps to move legislation in the Senate.
He called on Senate Republican leader Mitch McConnell to work with him on a compromise bill that could be enacted before the deadline.
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