Saturday, July 16, 2011

Obama: Americans back me on debt deal

US President Barack Obama

Source: Press TV

US President Barack Obama has made reference to polls to argue that his proposal of a "balanced approach" on a debt deal is what the American nation wants.

"My Republican friends have said that they're not willing to do revenues, and they have repeated that on several occasions," CBS News quoted Obama as saying at a news conference at the White House on Friday.

"My hope, though, is that they're listening not just to lobbyists or special interests here in Washington, but they're also listening to the American people. Because it turns out, poll after poll, many done by your organizations, show that it's not just Democrats who think we need to take a balanced approach, it's Republicans as well," he added.

"The clear majority of Republican voters think that any deficit reduction package should have a balanced approach and should include some revenues. That's not just Democrats. That's the majority of Republicans."

The remarks come as a Gallup poll released on Wednesday found that only 20 percent of Americans support a deal that only includes spending cuts -- which has been advocated by Republicans.

The survey also revealed that another 30 percent of Americans wanted a deal that was "mostly" spending cuts, and 32 percent wanted a deal split equally between spending cuts and tax increases. Eleven percent favored a deal that was mostly or all tax increases.

Meanwhile, New York-based Standard & Poor's financial services company has put the US AAA rating on formal credit watch, warning there is a chance of downgrade if talks between the White House and Republicans on raising the debt limit remain stalemated.

On Wednesday, Moody's Investors Service also placed the US triple-A rating on review for a possible downgrade over concerns that the debt threshold will not be raised in time to prevent a missed payment of principal (amount owed) and interest on outstanding bonds and notes.

Federal Reserve Chairman Ben Bernanke has warned that a global financial crisis could take place if the US debt ceiling is not raised by its August 2 deadline.

Speaking before the US House of Representative's Financial Service Committee on Wednesday, he emphasized that if the country's debt ceiling is not raised, the US government would choose to stop offering benefits such as Social Security payments and instead pay its creditors.

“The assumption is that as long as possible, the Treasury would want to try to make payments on the interest to the government debt, because failure to do that would certainly throw the financial system into enormous disarray and have major impacts on the global economy,” Bernanke said.

He further explained that the government would have to slash domestic spending by as much as 40 percent as an alternative plan. This, however, is expected to bring the country's economic growth to a standstill.

The US reached its borrowing limit, currently at USD 14.3 trillion, on May 16, up from USD 10.6 trillion when Obama took office in 2009.

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