Democrats and Republicans still have a long way to go to reach a deal to raise the US debt limit, President Barack Obama said Thursday, calling another round of crisis White House talks. "I will reconvene congressional leaders here on Sunday with the expectation that at that point the parties will at least know where each other's bottom lines are, and we'll hopefully be in a position then to start engaging in the hard bargaining that's necessary to get a deal done," Obama said.
The talks are part of a final major push to reach a deal to raise the congressionally-determined limit on US borrowing, now set at $14.29 trillion, in the face of a budget deficit expected to hit $1.6 trillion this year. The US hit the debt ceiling on May 16, but has since used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating without impact on government obligations.
But by August 2, the government will have to begin withholding payments - to bond holders, civil servants, retirees or government contractors - and the White House has urged a deal by July 22 to have time to pass it. "I just completed a meeting with all the congressional leaders, from both chambers, from both parties, and I have to say that I thought it was a very constructive meeting," Obama said. "People were frank."
"Everybody acknowledged that we have to get this done before the hard deadline of August 2nd, to make sure that America does not default for the first time on its obligations." Obama thanked leaders for the constructive meeting, but warned that "a lot of work" needed to be done before Sunday. "I want to emphasise that nothing is agreed to until everything's agreed to, and the parties are still far apart on a wide range of issues," he said.