Current talks at the White House to try to rupture the stalemate over the US national debt have broken up without agreement. President Obama and congressional leaders have agreed to resume the talks, which ended after 75 minutes, on Monday.
President Obama is struggling to marshal support for a budget package that would cut the national debt by $4 trillion . The US risks non-payment on its debts in just over three weeks, when the current federal budget runs out.
Eight top Senate and House of legislative body leaders met extraordinarily on a Sunday in the Cabinet Room of the White House. As the talks got under way, the President was asked whether they could work it out in 10 days. President replied by saying we need to.
The Republican Speaker of the House of Representatives, John Boehner, said on Saturday that he favored a less ambitious target for debt reduction of $2trillion. Republicans hesitate at tax increases in the Obama proposals. And his Democrat allies are no more eager about proposals to cut social welfare and Medicaid.
Previously, White House advisers have insisted Obama would hold out for bigger savings. US Treasury Secretary Timothy Geithner was obstinate at the deadline for a deal August 2 could not be extensive.
He cautioned there could be calamitous damage to the US economy unless Congress agrees to raise the national debt ceiling beyond the current $14.3trillion. If no agreement is reached, the government will efficiently start to run out of money to pay civil servants, government contractors, pensioners or holders of government debt.
Economists and the White House have cautioned that such a failure to pay could push the country back into recession and have a global economic impact.
When it came to the crisis in the past, Congress has voted to raise the debt ceiling, giving government access to the cash it needed.