US President Barack Obama demanded on Friday “concrete plans” from lawmakers to avert a financial catastrophe as the US government risks defaulting on its debt for the first time.
The White House has been pushing for an agreement by the end of next week in order for it to be enacted by Congress before the August 2 deadline set by the Treasury Department to increase the nation’s debt cushion in order to meet its current obligations.
“We are obviously running out of time,” Obama said at a press conference at the White House briefing room.
The White House has insisted that any deal include some mechanism for raising more revenue in order to significantly pay down the deficit, but congressional Republicans have balked at the prospect of tweaking the tax code for deficit reduction. That remains the largest stumbling block in negotiations.
Republicans would instead prefer deep spending cuts past the USD 2.4 trillion amount the administration seeks to raise the debt ceiling.
The House hopes to pass a plan next week that includes the cuts, along with a provision for a balanced-budget amendment.
The president reiterated that a failure to raise the USD 14.3 trillion debt ceiling could carry severe consequences for the American public, including an increase in interest rate, which he likened to a “tax increase on everybody.”
“This is not some abstract issue,” Obama said. “Congress has run up the credit card. We now have an obligation to pay our bills.”
Obama has asked congressional leaders on both sides to determine in the next day or so what kind of plan can pass the Democratic Senate and the Republican-held House in order to forge a path ahead. No talks between the sides are expected Friday.
But he made it clear that he wouldn’t accept a plan that would only feature spending cuts that match the debt-ceiling increase.