White House Confident US Debt Default Can Be Averted

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President Barack Obama addresses the nation from the East Room of the White House in Washington, Monday, July 25, 2011, on the approaching debt limit deadline
Five days before the deadline, White House officials said Thursday they are confident that a compromise can be reached to raise the U.S. debt ceiling and prevent a government default.  But Obama administration officials say Republican lawmakers are holding the economy hostage. Meanwhile, a vote in the House of Representatives on a Republican plan to raise the U.S. debt ceiling and cut spending has been postponed. U.S. media, quoting congressional sources, say the vote was delayed because Republican leaders are seeking more congressional support to pass a plan put forth by House Speaker John Boehner. 

At his daily media briefing, White House Press Secretary Jay Carney said President Barack Obama’s administration is optimistic that a debt agreement can be reached.  

“If there is political will, there is a real opportunity here to do something significant - politically hard, but significant.  And politically hard for Democrats and Republicans.  And I know that is what the American people want and expect,” Carney said.

As Carney spoke to reporters, the House of Representatives debated Speaker John Boehner’s proposal for raising the government's borrowing limit and cutting the federal deficit.

The president’s spokesman said that regardless of how the bill fares in the Republican-led House, it would not pass the Democratic-controlled Senate.

“What I know about the speaker’s proposal in the House right now is that there are already, I believe, 55, 56, 57, 58 Senators -- Democrats and Republicans - who oppose it.  It ain’t going anywhere in the United States Senate.  So we need to start doing things that actually can pass both houses [of Congress] and be signed into law,” Carney said.

Boehner’s bill would cut government spending by $917 billion over 10 years.  It would require two separate votes to raise the debt ceiling before next year's general elections.

Administration officials have said that President Obama will only consider a short-term debt increase if preparations are being made to implement a longer-term fix.  

Mr. Obama prefers a proposal by Senate Majority Leader Harry Reid that would also cut spending, but would extend the debt limit increase until 2013.  The Reid plan is not likely to pass the House.

As the August 2 deadline nears, the verbal sparring between Democrats and Republicans has grown more rancorous.  On Thursday, White House Press Secretary Jay Carney accused House Republicans of holding the U.S. economy hostage.  He also alleged that some opposition lawmakers were planning to allow a default and blame the president.  Carney called those lawmakers “incredibly juvenile.”

Throughout the debt crisis, Speaker Boehner and other Republican lawmakers have accused President Obama of failing to lead.  And No. 2 House Republican, Eric Cantor, said Thursday that if Boehner’s bill does not pass the Senate, Senator Reid will be responsible if the government defaults.

While the debt debate has shifted to Capitol Hill, the president has not spoken publicly about the crisis in several days.  Carney said Mr. Obama has been talking with many of the key figures in the debate, but he would not specify who the president has called or what was discussed.
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