Top US Lawmakers: US Will Not Default on Debt

Posted June 2nd, 2011 at 8:15 pm (UTC-5)
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Senior U.S. lawmakers say Republicans and Democrats will eventually reach a deal to raise the country's $14 trillion debt limit.

The number two Democrat in the U.S. House of Representatives, Steny Hoyer , says financial markets should know that lawmakers will come to an agreement on the issue.

House Democratic leader Nancy Pelosi says members of both political parties must make sure there is no default on the debt.

Hoyer and Pelosi made their remarks after House Democrats met with President Barack Obama at the White House Thursday for talks on the U.S. deficit and debt.

U.S. Treasury Secretary Timothy Geithner also said he is confident a debt crisis will be averted, after meeting Thursday with Republican lawmakers.

Meanwhile, the credit rating agency Moody's warned that lack of progress on the issue could jeopardize the U.S. government's high credit rating.

Another agency, Standard & Poor's, issued a similar warning in April.

Earlier this week, the Republican-controlled House defeated a bill to raise the country's $14 trillion debt limit by about $2 trillion with no spending cuts.

Republicans are calling for deep and immediate spending cuts, while Democrats favor spending cuts or tax increases over several years.

Secretary Geithner has warned the U.S. could face “catastrophic consequences” if lawmakers fail to raise the debt limit. He has said he will use emergency measures to re-allocate funds to continue making payments on the U.S. debt. Those measures will give him until August 2 before the nation will have to stop making some payments altogether.