US & Canada

Obama underscores urgency of debt-plan deal

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Media captionPresident Obama: "This is one burden we can lift ourselves"

US President Barack Obama has said Democrats and Republicans must compromise to cut the US budget deficit and raise the debt limit.

He warned time had almost run out, before Speaker John Boehner made an impassioned speech in the House of Representatives ahead of a vote.

Meanwhile, Democrats announced they would put their plan to the Senate.

The fiscal fiasco leaves the US inching closer to a potentially catastrophic default on federal debt next Tuesday.

The US government will start running out of money to pay all its bills unless a $14.3tn (£8.79tn) borrowing limit is increased by 2 August.

'Last train leaving'

At the White House, Mr Obama accused House Republicans of pursuing a partisan bill that would force Washington into another debt limit fight within months.

He said: "There are plenty of ways out of this mess, but we are almost out of time."

"The time for putting party first is over," he added. "The time for compromise on behalf of the American people is now."

In Congress, the arm-twisting continued on Friday.

House Speaker John Boehner and his lieutenants were working to whip Republicans into line behind their plan to cut the budget while raising the debt limit.

A vote on that bill was tentatively scheduled for between 17:45 local time (21:45 GMT) and 18:15 local time (22:15 GMT), after being called off on Thursday night when it became clear Mr Boehner lacked support within his own party.

Mr Boehner appeared to have won over recalcitrant conservatives in his party by strengthening language calling for the so-called "balanced budget amendment".

That proposal calls for a vote on an amendment to the US constitution - a move certain to be rejected by the Senate.

Senior Senate Democrats said the upper chamber would vote on some sort of compromise proposal at the weekend, and invited Senate Republican Leader Mitch McConnell for talks.

Analysts say that if the Senate passes legislation first, it could increase the president's leverage in a final deal.

"Too much is at stake to waste even one more minute - the last train is leaving the station," Senate Democratic Majority Leader Harry Reid said.

But Mr McConnell accused Democrats of wasting precious time and obstructing a deal by vowing to block Mr Boehner's bill, should it be passed in the House.

"Republicans have been doing the hard work of governing this week," he said.

Mr Boehner convened a closed meeting of all 240 House Republicans on Friday morning to outline tweaks he has made overnight to the legislation.

Mr Boehner and other Republican leaders spent all day Thursday arm-twisting dissident lawmakers, but they were unable to win over enough conservative hard-liners.

Some Republicans - including Tea Party supporters who won House seats last year and oppose raising the debt limit under any circumstance - feel the Boehner bill would not cut enough from the US budget.

Mr Boehner's plan faces certain rejection by the Democratic-controlled Senate, as well as a White House veto threat, but could form the basis of an eventual compromise.


It would reduce spending by about $900bn and raise the debt limit by nearly the same amount.

Image caption Speaker John Boehner's plan cannot pass the Democratic-controlled Senate

The Reid plan - which Mr Obama supports - would cut $2.2tn from deficits, and raise the debt ceiling by $2.7tn.

One possible scenario is that Mr Obama and Senate Democrats could shape a bill to their liking, then dare divided House Republicans to plunge the nation into default by rejecting it.

The Boehner and Reid plans overlap in key ways, such as trimming spending over 10 years and shunning President Obama's call for tax increases on the wealthy and corporations.

But Mr Boehner's approach would force another debt-limit showdown during next year's presidential campaign, something Mr Obama has fiercely opposed.

Mr Reid's plan would see the ceiling lifted until after the November 2012 elections.

Analysts predict a last-minute scramble for a compromise and razor-edge votes in both chambers, with the high-stakes game of legislative brinkmanship expected to continue all weekend.

Washington hit its debt ceiling in May, but has used accounting adjustments, as well as higher-than-expected tax receipts, to continue operating.

In recent decades, the US Congress has increased the government's borrowing authority dozens of times as a matter of routine.

But this year newly elected conservative Republicans have demanded steep cuts to the budget deficit as the price of an increase.

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