President Obama still pushing for big deal on debt

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WASHINGTON, DC (NEWS1130) – US President Barack Obama says Congress has a “unique opportunity” to stabilize the country’s economy for decades by cutting deficits and raising the national debt limit to avoid a first-ever default.

He starkly warns that failure to do so by the August 2nd deadline would effectively mean “a tax increase for everybody” if the government defaults, sending up interest rates and likely sparking a global financial crisis.

Still, Obama says Republicans opposition to any new tax revenue was complicating efforts to reach a deficit-cutting deal. “If they show me a serious plan I’m ready to move.”

The United States hit its current $14.3 trillion debt ceiling in May and has been juggling its books since then. Republicans, who control the House of Representatives, say they won’t raise the debt limit unless Democrats agree to major spending cuts to reduce the spiraling US deficit.

Democrats say cuts must be accompanied by some tax increases. Republicans, prodded by junior members backed by the small-government tea party movement, oppose any tax hikes.

The president spoke at the White House today after five straight days of meetings with congressional leaders failing to yield compromise, and amid increasingly urgent warnings from credit agencies and the financial sector about the risks of failing to raise the government’s borrowing limit.

Democratic and Republican congressional leaders agree on the need to avert that outcome, but that hasn’t been enough to get Republicans to agree to the tax hikes on corporations and the wealthy sought by Obama — or to convince Obama and Democrats to sign onto the steep entitlement cuts without new revenue that Republicans favour.

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