US President Barack Obama has told legislators must come up with a plan of action by Saturday morning to unblock talks on a new government debt deal.
He wants the country’s 14.3-trillion-dollar debt ceiling to be raised but Republicans are pushing for deeper spending cuts and oppose any tax hikes.
The US government will run out of money by August 2 if no agreement is struck. Obama says he will veto any short-term deal that will require to the cap to be increased next year.
Ratings agencies Moody’s and Standard & Poor’s say they may review the United States’ triple A credit rating if there is no deal and bills go unpaid.
Federal Reserve Chairman Ben Bernanke warned yesterday that a US debt default could provoke a major economic crisis.
Investors fear it would hamper any already fragile US economy, driving up interest rates and increasing the risk of a second recession.