Obama: Time Running Out On Big Debt Deal

President Barack Obama says U.S. lawmakers have a unique opportunity to stabilize the nation’s economy for a decade or more. But, the president said Friday time is running out for a deal to raise the government’s legal debt limit and cut deficits.

At his second news conference of the week, President Obama said failing to raise the debt ceiling by August 2 would cause a U.S. government default. He said that would lead to higher interest rates for all Americans, and likely a global financial crisis.

“We are obviously running out of time," said President Obama.

The president spoke after five days of White House meetings with the top Republicans and Democrats in Congress did not appear to produce any compromise.

Financial firms in the United States and China have warned of the risks of a U.S. default on its obligations.

Republicans say they will not raise the debt ceiling unless Democrats agree to big spending cuts to reduce the nation’s deficit.

Democrats say tax increases must accompany spending cuts, and Republicans oppose higher taxes.

President Obama pressed again Friday for an agreement to raise the debt ceiling while cutting as much as $4 trillion from the deficit.

“We have a unique opportunity to do something big," said Obama. "We have a chance to stabilize America’s finances for a decade or 15 years or 20 years, if we are willing to seize the moment.”

But Mr. Obama said he would accept a smaller deficit reduction plan, if necessary.

“I am still pushing for us to achieve a big deal," he said. "But what I also said to the group is, if we cannot do the biggest deal possible, then let’s still be ambitious. Let’s still try to at least get a down payment on deficit reduction.”

The president said he told lawmakers he wants them to show him their plan for raising the debt ceiling and shrinking the deficit.

“If they show me a serious plan, I am ready to move, even if it requires some tough decisions on my part," said the president.

Mr. Obama said Republican opposition to any new tax revenue was hindering efforts to reach an agreement.

Earlier Friday, the Speaker of the House of Representatives, Republican John Boehner, said it is the president who is not advancing a serious plan.

"We asked the president to lead," said Boehner. "We asked him to put forward a plan, not a speech, a real plan and he hasn't. But we will."

The top Senate Republican, Minority Leader Mitch McConnell, has proposed giving Mr. Obama greater authority to raise the debt ceiling while starting procedures which could lead to spending cuts.

The president said the plan would not address long-term budget problems.

Mr. Obama rejected Republican plans for a proposed balanced-budget amendment to the U.S. Constitution. He said such an amendment is not needed if officials in Washington do their jobs.