U.S. congressional leaders are holding urgent talks aimed at averting a default on the U.S. debt, by raising the country's $14.3 trillion debt ceiling.
Congressional sources say lawmakers hope to show progress by 4 p.m. local time Sunday, shortly before Asian financial markets open, on a plan to raise the debt ceiling.
On Saturday, U.S. President Barack Obama held a short emergency meeting at the White House on the debt crisis with the top Democratic and Republican lawmakers in Congress.
Mr. Obama later urged Congress to “do its job” to avoid a debt default. He also restated his opposition to a short-term extension of the debt ceiling, saying it could damage the nation's credit rating.
Senate Minority Leader Mitch McConnell and the speaker of the House of Representatives, John Boehner, said congressional leaders are committed to finding a bipartisan solution that will cut spending and prevent a default. Boehner said the solution will “preserve the full faith and credit of the United States.”
The U.S. must raise the debt ceiling by August 2, to allow the government to continue borrowing money to meet its obligations.
In addition to President Obama, McConnell and Boehner, the top Democrats in Congress, Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, attended the meeting on Saturday. Vice President Joe Biden was also there.
Boehner walked out of talks with the president on Friday. He later said President Obama had demanded an unacceptable increase in tax revenue that would require raising taxes on the people needed to invest in the economy and create jobs. Boehner said he remains confident the U.S. can avoid defaulting on its payments.
Republicans refuse to raise the debt ceiling without a major reduction in the deficit. They intend to accomplish the reduction through budget cuts alone, while Democrats insist on increasing tax revenue, which Republicans reject.
The U.S. Treasury Department, the central bank and the White House have all warned a default would have catastrophic consequences on the economy. Economists have said a default would also have a very negative effect on the global economy.
