Today's Coming Crisis Movie

Saturday, July 23, 2011

America edges towards default as debt talks collapse

The prospect of America defaulting on its debts edged closer last night after the fraught negotiations between President Barack Obama and top Republicans collapsed.

John Boehner, the top Republican in Congress, pulled out of negotiations with the White House late on Friday, saying that he President Obama "couldn't connect." President Obama has summoned Congressional leaders to The White House for a meeting today aimed at reviving talks on what's expected to be the hottest weekend of the year in Washington.

The White House, and Democrats and Republicans in Congress, have just over a week to find the common ground that allows them to lift the country’s $14.3 trillion (£8.7 trillion) debt ceiling. The heat on the chief players has intensified in the 48 hours since European leaders agreed a fresh Greek bail-out.

Congress is in the awkward position of trying to conjure up a deal on long-term deficit reduction as a condition of raising the debt ceiling by August 2, when the Treasury has said it will run out of money to pay its bills. (more)