US PRESIDENT Barack Obama has called for a “balanced approach” to a budget plan which will see the US overcome its current debt crisis.
The government has until the 2 August to reach a deal on raising its debt ceiling before it begins to default. Despite the mounting crisis, the US maintains a AAA credit rating.
The Daily Beast reports that analysts from influential ratings agencies Moody’s and Standard and Poor’s have refused to speculate about a US downgrade, although both agencies have already placed the US government on notice of a one-notch drop.
In a televised address from the White House alst night, Obama blamed his Republican predecessor for spending the government’s budget surplus on trillions of dollars in new tax cuts, “while two wars and an expensive prescription drug programme were simply added to our nation’s credit card”.
He said that the recession has meant less money coming in to the economy and warned that growing debt could cost jobs and do “serious damage to the economy”, adding that raising the debt ceiling used to be “routine” and did not mean Congress can spend more money:
It simply gives our country the ability to pay the bills that Congress has already racked up.
Obama said that both parties had been involved in months of negotiations, but have been approaching the problem from two different viewpoints, leading to the current impasse:
Following Obama’s address, House Speaker John Boehner, who leads the GOP’s budget negotiations, says the US cannot default, but that Obama cannot have the “blank cheque” he is seeking: “That is just not going to happen.”
He says the debt situation has “gotten so out of hand it sparked a crisis without precedent in my lifetime or yours”.
Boehner added that the debt limit increase would not be accepted “without significant spending cuts and reforms”.
Here’s some footage of Boehner’s rebuttal yesterday evening:
Read more: US has one week to avoid default >