Obama walks out of stormy debt crisis talks

Tempers are getting frayed in Washington over ongoing budget talks. The fourth crisis meeting between congressional leaders ended with President Barack Obama saying enough was enough and he would not compromise further.

With an August 2 deadline looming to reach a deal, pressure was piled on by Moody’s warning the US was on the verge of losing its top triple A credit rating.

Federal Reserve Chairman Ben Bernanke said that if a deficit reduction deal wasn’t agreed, clearing the way for a debt ceiling hike, the US would pay creditors first. That would mean no cash for benefits, military veterans or pensions.

The crux of the matter is, the US hit its 14 trillion dollar debt ceiling in May but has since used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating.

Republicans are refusing to lift the ceiling without Obama agreeing to deep government spending cuts.

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