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.
There is still time, however, to reach an agreement, the president said.
The Treasury Department has set Aug. 2 as the date when the federal government must declare itself in partial default of payments, which means that raising the debt ceiling of $14.29 trillion gets more urgent every day.
The Democrats presented a new plan cutting public spending by $2.7 trillion in a decade and including no tax increases, one of the controversial points in the negotiations.
Boehner, meanwhile, insisted on a proposal that in two phases would reduce the total U.S. deficit by $3 trillion , but would require a new vote on the debt limit by Congress in early 2012, and would be linked to the creation of a committee that would offer specific recommendations on spending cuts.
Boehner answered in a televised speech minutes after Obama's address, that the United States must not fail to fulfill its obligations, and accused the U.S. president of wanting a "blank check."
The Republican leader wanted his plan, which according to sources close to the party he intends to submit to a vote on Wednesday, to be passed by the House, later by the Senate, and then signed by the president.