Washington – President Barack Obama again addressed the nation to warn that if an agreement is not reached to raise the debt ceiling, the United States risks "a deep economic crisis" and called on Americans to pressure Congress to come up with a fair compromise.
At one week until the U.S. debt goes into default and after days of intense talks, Obama spoke to the nation Monday night from the East Room of the White House in a last-ditch effort to unblock the discussions.
"If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message," Obama said.
The countdown has become a sword of Damocles for Obama, since once an agreement is reached - if that should happen - it must be passed by the House of Representatives, the Senate and finally signed by the president.
Defaulting would be "a reckless and irresponsible outcome to this debate," Obama said, adding that simply raising the debt ceiling until the end of the year, as the Republicans propose, will not solve the problem and will not be sufficient to avoid a downgrade of the U.S. debt.
If the United States defaults, there will be no money to pay social security, veterans' benefits, nor the contracts signed with thousands of companies.
"Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy," the president said.
For the first time in history, moreover, the United States could lose its AAA credit rating, "leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, on mortgages and on car loans, which amounts to a huge tax hike on the American people. We would risk sparking a deep economic crisis - this one caused almost entirely by Washington," Obama said.
Boehner on Tuesday kept up efforts to rally support for his plan, which could come up for a vote in the House as early as Wednesday but is in doubt because of resistance from some conservatives in the Republican camp aligned with the Tea Party movement.
"It's reasonable, it's responsible. It can pass the House and it can pass the Senate," Boehner told reporters.
Boehner is pushing a two-stage deficit reduction plan that would start with an initial $1.2 trillion in savings over 10 years. Obama opposes it because it would raise the debt limit for only a few months, something he has said he will not agree to.
The chief Democratic vote counter in the House, Representative Steny Hoyer, said "maybe a few" Democrats would back Boehner's plan. That would boost the bill's chances in what is expected to be a close vote on Wednesday.
Boehner will not have enough Republican votes to pass his budget plan through the House without Democratic support, a leader of the chamber's conservatives said.
"I don't have an exact count, but I do not believe there are 218 Republicans supportive of it right now," said Representative Jim Jordan, who heads the Republican Study Committee, a group of more than 150 conservative and Tea Party-aligned lawmakers.
Obama's Democrats have presented their one-step plan for $2.7 trillion in deficit reduction over the next decade but with a debt limit hike that would carry through the November 2012 elections, when he is seeking a second term.
Senate Majority Leader Harry Reid, a Democrat, is expected to hold off on any vote on the plan until the House takes up Boehner's proposal.
Republican and Democratic lawmakers, despite weeks of intense talks, are far apart on a deal to reduce the budget deficit, which would clear the way for Congress to lift the debt ceiling by next week, when the country runs out of cash to pay all of its of its bills. Democrats control the Senate. Republicans control the House of Representatives.
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