Wed, Jul 27, 2011 - Page 1 News List

Obama says US faces ‘deep crisis’ if debt talks fail

AFP, Washington

US President Barack Obama warned of a “deep economic crisis” if the US fails to raise its debt limit and urged Americans to pressure Republican lawmakers to compromise to avert a default.

In a televised addresss late on Monday — only eight days before Washington begins to run out of money to pay its bills — Obama called the weeks-long debt talks stalemate “a dangerous game” that the country “cannot afford to play.”

Obama cast the blame for the stalemate on the Republicans’ refusal to raise the US$14.3 trillion debt ceiling unless there is agreement to make deep spending cuts without increasing taxes on the wealthy.

If Congress fails to raise the ceiling by Tuesday, the resulting disaster could include higher interest rates for the US government as well as for consumers.

Failure to compromise, Obama said in his speech, “would risk sparking a deep economic crisis — one caused almost entirely by Washington.”

He rejected a Republican proposal for a temporary increase in the debt limit, saying it would leave the underlying problem unresolved and lead to a repeat of the current crisis in just six months’ time.

“That is no way to run the greatest country on Earth. It is a dangerous game we’ve never played before and we can’t afford to play it now,” he said.

Obama appealed to Americans to “make your voice heard” to members of Congress and many people appeared to have heeded the president’s call.

US media reported that various congressional Web sites — including those for House Speaker John Boehner, House Majority Whip Kevin McCarthy and Representative Michele Bachmann — were inaccessible, after an apparent server crash following the speech.

Boehner responded with a late-night speech of his own, blaming Obama for the crisis and warning that while the US cannot default on its debt obligations, Americans nevertheless would demand deep spending cuts.

Meanwhile, there were signs the standoff was exacting a political toll on both sides.

A poll for the Washington Post and ABC television showed weakening support for Obama’s economic agenda and found the percentage of people who said he has made the economy worse has jumped six points since October last year to 37 percent.

The poll also found that 65 percent disapproved of the GOP’s handling of jobs — still the top economic issue — compared with 52 percent for the president.

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