Obama warns of need to resolve debt limit issue soon
US President Barack Obama warned Monday of a possible second recession if he and congressional lawmakers cannot reach a deal to increase the US debt limit, DPA reported.
Obama, speaking after a series of meetings with Republican and Democratic leaders in Congress, said an inability could provoke a "crisis of confidence" in the markets that could cause interest rates to rise and harm credit.
Obama and the Republicans - who control the House of Representatives - are at a political stalemate over raising the debt ceiling.
Republicans have demanded steeper cuts in federal spending. Obama has agreed to reductions, but also wants to end Bush-era tax cuts for America's wealthiest households in order to increase revenues.
"They're going to have to compromise just like Democrats are going to have to compromise," Obama said, "just like I have shown myself willing to compromise."
The debt limit currently stands at 14.3 trillion dollars. But it must be raised to meet an August 2 deadline on loan obligations. A failure to do so could harm the US credit rating.
Obama said he would insist on reaching a final deal in the coming weeks and would not sign off on a temporary spending measure, adding that it would be harder to reach a deal, the closer it gets to the 2012 elections.
"If we think it's hard now, imagine how these guys are going to be thinking six months from now, in the middle of election season when they're all up," Obama said. "It's not going to get easier; it's gonna to get harder. So we might as well do it now."