US inches closer to government default

Speaker of the United States House of Representatives John Boehner

Source: Press TV
http://www.presstv.ir/detail/189706.html

Democrats and Republicans are still squabbling over how to prevent a debt default in the United States as the deadline approaches.

The White House has threatened to veto a Republican plan for federal spending if Congress approves it, Reuters reported on Monday.

The plan can clear the way for an increase in the debt ceiling before August 2, when the government faces a default on its financial obligations, if the lawmakers approve starting the process for a constitutional amendment.

House Speaker John Boehner said in a statement, "The cut, cap and balance plan that the House will vote on next week is a solid plan for moving forward. Let's get through that vote, and then we'll make decisions about what will come after.”

The bill would cut fiscal year 2012 spending by $111 billion, cap future spending at 18 percent of GDP, and propose a balanced budget amendment to the Constitution.

“It's disappointing the White House would reject this common-sense plan to rein in the debt and deficits that are hurting job creation in America. While American families have to set priorities and balance their books, this White House obviously isn't serious about making the same tough choices,” Boehner said, adding, “If we are going to raise the debt limit and avoid default, the White House must be willing to demonstrate more courage than we have seen to date.”

The US hit its borrowing limit of $14.3 trillion on May 16, up from $10.6 trillion when Obama took office in 2009.

The Democrats and the Republicans have been holding talks on ways to curb the massive debt but have been unable to reach an agreement.