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Weekend scramble to stave off US default

Weekend scramble to stave off US default
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US lawmakers have a long weekend ahead of them as they scramble to raise the government’s debt limit by an August 2 deadline and prevent an unprecedented default.

Overnight the House passed Republican John Boehner’s deficit bill but, as expected, the Democratic-controlled Senate rejected it.

Democratic House minority leader Nancy Pelosi told the House: “This bill is going nowhere. It is a total waste of time. And every day we spend on this waste of time is another day we are not talking about the highest priority of the American people which is job creation.”

President Barack Obama immediately renewed his appeal for lawmakers to find a compromise between cutting spending and raising taxes and the weekend will see negotiations on a Democratic bill.

Procedural matters mean it will reach Obama at the 11th hour at best and even then there is a real risk the US will lose its triple A credit rating.

The debacle has prompted the World Bank and America’s largest creditor, China, to admonish Washington.