Today's Coming Crisis Movie

Monday, July 25, 2011

Warring U.S. politicians warned to cut a debt deal today or risk default and global economic havoc - 25th July 2011

Bitterly divided U.S. politicians will hit a crunch deadline today as they struggle to reach a deal to cut the country's deficit and avert a potentially catastrophic default.

Democrats and Republicans were working on separate budget plans as the negotiations remained deadlocked over the weekend - but they must thrash out an agreement urgently if they are to pass crucial legislation in time for the cut-off date of August 2.

Washington has until next Tuesday to cut a deal to increase its £8.8trillion debt ceiling or face running out of money to pay for essential public services.

Failure would mean the U.S. could be stripped of its triple-A credit rating, which would cause havoc in global markets.

Treasury Secretary Timothy Geithner has warned that the two camps need to come up with the basis of a deal by today to avoid this fate.

‘They need to get this process moving in the House by Monday night,' he said. ‘To achieve that deadline they need to have a framework that they know with complete confidence will pass both houses of Congress that is acceptable to the President.’

The brinkmanship across the Atlantic has led to nervousness on European financial markets, with the FTSE 100 trading down 16.2 points at 5,918.8 today. Read More