US President Barack Obama on Friday said Congress has a “unique opportunity to do something big” and stabilise the economy by cutting deficits even as it raises the national debt limit to avert an unprecedented default.
Saying he was ready to make tough decisions and challenging Republicans to do the same, Obama attempted to turn the Republicans’ opposition to any tax increases back against them, warning that failure to raise the debt ceiling would mean “effectively a tax increase for everybody”.
Administration officials and private economists say that if the US fails to raise its borrowing limit by August 2 and begins to stop paying its bills as a result, the fragile US economy could be cast into a crisis that would reverberate around the globe.
The US hit its current $14.3 trillion debt ceiling in May and has been juggling its books since then. Republicans, who control the House of Representatives, say they won’t raise the debt limit unless Democrats agree to major spending cuts to reduce the spiralling US deficit.
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