US Warned by Top Senator for Reaching Brink
On Sunday, US President Barrack Obama, together top US lawmakers, were in search for a deal in order to avert a debt default by the nation. This was after economists expressed that such debt default spells catastrophic ripple effects on the economic markets.
Polarized US leaders came together for a closed door meeting at the White House and in the halls of Congress with fear that the debt default could cause market problems beginning with the early Monday trade in Asia.
Republicans were accused last Saturday by Democratic Senate Majority Leader, Harry Reid, for having brought the richest country of the world to the “brink of default” as it rejected a deal that would have lasted up to the 2012 election.
‘Anything less than that will fail to provide the certainty that the markets — and the world — are looking for, risking an immediate downgrade of America’s credit rating,’ he said at day’s end. ‘Now is the time for cooperation,” he said.
In a conference call called in by the Republican House Speaker, John Boehner, he stated that he is hoping for a deal that will soothe and calm the worried investors especially in Asia within the next 24 hours.
‘We are working, and I’m confident there will be resolution. There has to be,’ Boehner has said.
The deal is about a two-step process that is focused on cutting $3-4 trillion in spending over 10 years. This is also part of a deal to raise the US debt limit of $14.3 trillion by August 2 as deadline.
On May 16, Washington reached its debt ceiling. But to pay its bills and continue to operate up to the day of reckoning, it is using spending and accounting adjustments.
It has been warned that failure to raise US debt ceilings by then would mean shockwaves to the world economy. Furthermore, Obama himself has predicted that the default would start economic “Armageddon”.
The US economy would be rolling back to recession if it keeps its unemployment at 9.2 per cent.
Boehner responds to Reid through his spokesman saying that ‘a two-step plan is inevitable’ and that he ‘believes that defaulting on the full faith and credit of the United States is not an option.’
The Republicans have been accused by Pelosi of walking away from 98 per cent of the American people in order to protect the top two percent wealthiest’ assets.
McCornell said that the Congress is “committed to working on new legislation that will prevent default while substantially reducing Washington spending.”
Boehner said ‘over this weekend, Congress will forge a responsible path forward.’
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Source: SKYNEWS.COM.AU
