News / USA

White House and Congressional Leaders: No Default on US Debt

President Barack Obama meets with congressional leaders on deficit reduction in the Cabinet Room of the White House in Washington, July 13, 2011
President Barack Obama meets with congressional leaders on deficit reduction in the Cabinet Room of the White House in Washington, July 13, 2011
Michael Bowman

The White House and congressional leaders remain adamant the United States will not default on its $14.3 trillion national debt, less than three weeks before a deadline for raising the federal borrowing limit.  But a bipartisan deal to put the nation on a sustainable fiscal path shows no sign of materializing.

On one point top Democrats and Republicans agree: failing to raise America’s debt ceiling in time to avert a default on federal obligations is unthinkable.  Jacob Lew is President Barack Obama’s top budget official. "All the leaders of Congress and the president have acknowledged that we must raise the debt limit, and the question is how," he said.

Lew spoke on ABC’s This Week television program.

The Senate’s number-two Republican, Jon Kyl, had a similar message. “The country will not default.  Whether or not there are savings achieved in the process remains open to question," he said.

Weeks of negotiations have failed to yield a so-called “grand bargain” to trim U.S. budget deficits by $4 trillion over 10 years.  The impasse has prompted several fallback plans to raise the debt ceiling if the $4 trillion target is not met.

Senate leaders are negotiating a plan that would allow President Obama to extend the federal borrowing limit even if majority votes in Congress do not materialize authorizing such a move.  In the Republican-controlled House of Representatives, a vote is expected later this week that would tie a debt ceiling increase to a more-modest deficit reduction target, as well as a constitutional amendment requiring a balanced budget.

Neither plan of last resort is seen as solving America’s fiscal woes.  Appearing on CBS’ Face The Nation program, Republican Senator Tom Coburn of Oklahoma criticized any attempt to shield Congress from painful votes to raise the borrowing limit. “It takes the pressure off all the politicians.  It allows us to pass a debt limit [increase] without making the hard choices that this country has to make," he said.

Another Republican, Senator Marco Rubio of Florida, blasted any scaling back of deficit reduction goals. “The real problem here is not the debt limit.  The real problem here is the debt.  If all we do is raise the debt limit, and it is not accompanied by a credible solution to America’s debt problem, we are in big trouble," he said.

August 2 is the deadline for raising the federal government’s borrowing limit.  Beyond that date, treasury officials say the U.S. government risks default.

Some Republican lawmakers have questioned this assertion, saying the United States could service the national debt and fulfill core obligations using tax revenue alone.  Democrats and the White House dispute the claim, saying the government would have to choose between interest payments on the debt, funding programs that provide income and health care for retirees, and funding the U.S. military.

Office of Management and Budget Director Jacob Lew says there is still time strike a deal and avert financial ruin.  But he adds that time is running out. “It is kind of unfortunate that things always have to get to the last minute.  Sometimes there are no consequences.  Right now, we are in a place where the world is watching, and we should get our business done," he said.

Credit ratings agencies have warned of a possible downgrading of U.S. debt, which would make U.S. Treasury bonds less attractive to investors and creditor nations and require higher interest rates to attract purchasers.  Economists warn that higher interest rates would cripple America’s shaky economic recovery.

You May Like

Official: S. Sudan President, Rebel Leader to Meet in Tanzania

Talks part of effort to end conflict in country that has left more than 10,000 people dead, displaced more than 1.5 million others More

Dutch Deny Link to Mystery Submarine off Sweden

Netherlands denies Russian claim that 'foreign vessel' photographed in waters off Sweden could be Dutch More

China Boosts Efforts to Help Afghan, Regional Stability

Observers say China’s increased regional involvement are due to concerns that Afghan instability and the presence of anti-China militants in Pakistani border areas could fuel Xinjiang troubles More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Exclusive: American Joins Kurds' Anti-IS Fighti
X
Zana Omer
October 18, 2014 6:37 PM
The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.
Video

Video Syrian Defector Leaks Shocking Photos of Torture Victims

Shocking photographs purporting to show Syrian torture victims are on display at the U.S. Holocaust Memorial Museum in Washington. The museum says the graphic images are among thousands of photographs recently smuggled out of Syria by a military policeman-turned-defector. As VOA reporter Julie Taboh reports, the museum says the photos provide further evidence of atrocities committed by the government of Syrian President Bashar al-Assad against its own people.
Video

Video Drought-Stricken California Considers Upgrading Water System

A three-year drought in California is causing a water shortage that is being felt on farms and cities throughout the state. As VOA's Mike O’Sullivan reports, water experts, consumers and farmers say California needs to make changes to cope with an uncertain future.
Video

Video TechShop Puts High-tech Dreams Within Reach

Square, a business app and card reader, makes it possible to do credit card transactions through cell phones. But what made Square possible? VOA’s Adrianna Zhang and Enming Liu have the answer.
Video

Video Church for Atheists Goes Global

Atheists, by definition, do not believe in God. So they should have no need of a church. But two years ago, a pair of British stand-up comedians decided to create one. Sanderson Jones and Pippa Evans told the BBC they envisioned “something like church but without God". Their “Sunday Assembly” movement has grown from a single congregation in London to dozens of churches around the world. Reporter Mike Osborne visited with the members of a Sunday Assembly that now meets regularly in Nashville.
Video

Video Robot Locates Unexploded Underwater Mines

Many educators believe that hands-on experience is the best way to learn. Proving that the method works is a project developed by a group of students at the Stevens Institute of Technology, in Hoboken, New Jersey. They rose up to a challenge posted by the U.S. Department of Defense and successfully designed and built an underwater robot for locating submerged unexploded ordnance. VOA’s George Putic reports.
Video

Video Liberia's JFK Hospital Reopens After Temporary Ebola Exposure

JFK Hospital is Liberia’s largest and one of its oldest medical facilities. The hospital had to close temporarily following the deaths of two leading doctors from Ebola. It is now getting back on its feet, with the maternity ward being the first section to reopen. Benno Muchler has more for VOA News from Monrovia.
Video

Video Hong Kong Protests Expose Generation Gap

Most of the tens of thousands of protesters in Hong Kong are students seeking democracy. Idealistic youths say while the older generation worries about the present, they are fighting for the territory's future. VOA's Daniel Schearf reports from Hong Kong.
Video

Video Liberians Living in US Struggle From Afar as Ebola Ravages Homeland

More than 8,000 Liberians live in New York City, more than in any other city outside of Liberia itself. As VOA’s Bernard Shusman reports, with the Ebola virus ravaging their homeland, there is no peace of mind for these New Yorkers.
Video

Video Kurds See War-Ravaged Kobani As Political, Emotional Heartland

Intense fighting is continuing between Islamic State militants -- also known as ISIS or ISIL -- and Kurdish forces around the Syrian town of Kobani, on the Turkish border. The U.S. said it carried out at least nine airstrikes against Islamic State positions Friday. Meanwhile the U.N. has warned that hundreds of civilians would be massacred if the town falls to the militants. Henry Ridgwell looks at the strategic significance of the city.

All About America

AppleAndroid