U.S. must not default on its obligations: Obama

10:15, July 16, 2011      

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U.S. President Barack Obama pauses during a news conference in the Brady Press Briefing Room at the White House in Washington July 15, 2011. Obama and Republicans traded demands for a serious deficit plan on Friday, underscoring the lack of progress and acrimony plaguing negotiations to avert a looming U.S. government default. (Xinhua/Reuters Photo)

The United States must not default on its obligations, and policymakers should strike a debt ceiling deal in a timely manner and improve the nation's fiscal sustainability, President Barack Obama said Friday.

Obama told reporters at a White House press conference that he was encouraged that both parties had recognized the importance of addressing the debt limit, adding that debt negotiators need to find common ground in the near term.

Obama stressed that he was still pushing for a big deal, but the debt reduction should be carried out in a balanced approach.

The borrowing limit, currently at 14.29 trillion U.S. dollars, was reached on May 16. The U.S. Treasury Department warned that the world's largest economy would default without an agreement to lift the limit by Aug. 2.

Obama urged that the nation was running out of time to ink a deal on raising the borrowing capacity and to secure the nation's top-notch credit rating.

Rating agency S&P cautioned Thursday there was a 50-percent chance it would downgrade the U.S. government's credit rating within three months due to the standstill of the debt talks and " significant uncertainty to the credit worthiness" of the issuer.

Eighty percent of the Americans support a balanced debt reduction plan including budget cutting and revenue increase efforts, Obama added.

Obama reiterated that the U.S. fiscal house should be in good order, but the nation should also continue making investments on key areas including education and research to bolster the economic growth over the long run.

Obama said the American people don't want to see a debt reduction "posturing," urging his Republican foes to take expeditious moves to agree to a massive package that could solve the nation's debt and budget problems for a long period of time.

"If they show me a serious plan, I'm ready to move," Obama added.
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Source: Xinhua
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