Obama calls for compromise to avoid debt failure

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Obama calls for compromise to avoid debt failure

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With little more than a week to come up with an agreement to prevent the US defaulting on its national debt, Republicans and Democrats are still at odds.

A frustrated President Barack Obama took to the air waves and, in an unscheduled address, called for compromise.

“We can’t allow the American people to become collateral damage to Washington’s political warfare,” said the president.

“The entire world is watching, so let’s seize this moment to show why the United States of America is still the greatest nation on earth… not just because we can still keep our word and meet our obligations, but because we can still come together as one nation.”

Although both sides agree the debt ceiling must be raised so the government can pay its bills, the Democrats want tax hikes on the rich to pay for it.

That is something the Republicans oppose, preferring budget cuts and a reduction in public- funded welfare programmes.

Republican House Speaker John Boehner responded to Obama’s address: “The solution of this crisis is not complicated: if you are spending more money than you are taking in, you need to spend less of it. There is no symptom of big government more menacing than our debt. Break its grip and we begin to liberate our economy and our future.”

Despite weeks of negotiations and false dawns when both sides appeared to come close, time is running out. Congress has to reach a deal, otherwise interest rates will rocket, sparking a deep economic crisis.