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White House clings to hope of avoiding default

Business Materials 28 July 2011 05:49
US President Barack Obama still believes a budget deal can be reached in time to stave off a potential default on US debt, the White House said Wednesday.
White House clings to hope of avoiding default

US President Barack Obama still believes a budget deal can be reached in time to stave off a potential default on US debt, the White House said Wednesday, DPA reported.

"We still firmly believe that a compromise is essential and possible," spokesman Jay Carney said.

Top US lawmakers were working through their proposals, making revisions in the hope of passage before August 2, when Obama's Treasury Department says it will run out of money to continue paying all bills. Unless Congress authorized the federal government to borrow new money, the country could face a first-ever default on debt obligations and a downgrading of its highest-possible bond rating.

Republican leader and House Speaker John Boehner delayed a Wednesday vote on his legislation because of a lack of support. His office is working to modify the proposal.

In the Democratic-controlled Senate, majority leader Harry Reid was reworking his own proposal. Both congressional leaders are trying to find compromises while also placating the rank-and-file of their parties.

Boehner is facing the strongest opposition, with the Republicans' conservative Tea Party faction demanding steeper cuts in federal spending that Obama has said he will not accept.

"We believe that there is a place to find compromise," Carney said.

"The president's made clear that he believes that this has been an opportunity to do something big and historic that requires political will by Democrats and Republicans, a willingness to take heat from your base, as opposed to placate your base."

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