Wednesday, July 13, 2011

Obama: Retirees' checks not guaranteed

US President Barack Obama

Source: Press TV

US President Barack Obama has warned in case Congress does not submit its approval to raise the debt ceiling by the August 2 deadline, some employees' and specially the retirees' income will be put at risk.

"I cannot guarantee that those checks go out on August 3 if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Obama said in an interview with CBS television on Tuesday.

"This is not just a matter of Social Security checks," he added. "These are veterans' checks, these are folks on disability and their checks. There are about 70 million checks that go out."

"The need for the United States to take action so that it fulfills its obligations and pays its debts, as it has in the entirety of its existence, is not a Democratic problem," White House spokesman Jay Carney said, stressing that it is rather “an American problem.”

"The president feels very strongly about this. I would also note that while Congress has to vote to raise the debt ceiling, the president doesn't have a vote in this. It's Congress that has to act," he said.

The US Treasury has announced that it will exhaust its borrowing capacity by August 2, which means that it will run out of funds to timely repay all its debts.

Treasury officials have also warned that failure to seal a deal by the August deadline could spook investors, causing US interest rates to surge, stock prices to plummet and putting the US at risk of another recession.

The US officially hit its USD-14.3 trillion debt ceiling on May 16, up from USD-10.6 trillion when Obama took office in 2009.

The White House and negotiators from Congress have to meet an August 2 deadline to decide on federal spending cuts and increasing the borrowing limit so that the US will not default on debt payments.

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