Obama rejects stopgap in favor of major debt reform

15:30, July 12, 2011      

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U.S. President Barack Obama called on Democrats and Republicans Monday to use the ongoing debt limit negotiation as an opportunity to introduce meaningful reforms for long-term debt reduction.

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

Before meeting congressional leaders for the second consecutive day, Obama pushed top lawmakers from both parties to reach a deal to slash government spending and make the government "leaner, meaner, more effective and more efficient."

"If not now, when?" said Obama at a White House press conference Monday, adding he would back a large-scale spending cut deal and both parties had to reach a debt ceiling agreement by the Aug. 2 deadline.

A potential deal -- a package of spending cuts and tax hikes that could total 2 trillion U.S. dollars or more over a decade -- is considered necessary for Congress to lift the debt limit.

Talks between Obama and the congressional leaders Sunday failed to break the stalemate over raising the debt ceiling and Monday's follow-up meeting likewise failed to resolve differences on the debt ceiling and trimming the deficit.

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