Obama blames Republicans on debt

25 July 2011 Last updated at 21:37 ET

US President Barack Obama has blamed conservative Republicans in the House of Representatives for the lack of a deal to avoid a US national default.

At the White House, Mr Obama said the Republicans were insisting on steep budget cuts as the price of an increase in the debt limit.

He called for an approach that would also raise taxes on wealthy Americans.

The US risks default on its $14.3tn (£8.7tn) debt without a deal to raise the borrowing limit by 2 August.

“Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach,” Mr Obama said in a nationally-televised address.

The US government runs an annual budget deficit that topped $1.5tr (£920bn) this year, and has amassed a national debt of $1.5tn.

‘Balanced approach’

Votes to raise the US debt limit have historically been a matter of routine in the US Congress, but this year, Republicans – buoyed by a newly crop of fiscal conservatives – have refused to accede to a debt increase without significant reductions in the budget deficit.

On Monday night, Mr Obama said he and Republican House Speaker John Boehner, who made a rebuttal address shortly after Mr Obama, had worked in recent weeks to craft an agreement.

That deal would have trimmed $4tn (£2.5tn) from the deficit over ten years, in a mixture of spending cuts and tax increases on the wealthy and on corporations, Mr Obama’s.

“The only reason this balanced approach isn’t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach,” Mr Obama said.

That approach, he added “doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all.”

Mr Boehner, meanwhile, said Mr Obama had requested a “blank check”, and he insisted the US government’s “spending binge” was over.

But he agreed the US “cannot default on its debt obligations”.

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