Obama seeks to break debt impasse with Congress

[emezico]

US President Barack Obama is to meet Congressional leaders for talks on the government's debt aimed at staving off a looming default.

House Speaker John Boehner said he was abandoning plans for a comprehensive $4tn (£2.4tn) debt reduction deal that involved tax increases for the wealthy.

Instead, he said Republicans would focus on a smaller $2tn package.

The White House and Congress have until 2 August to raise the debt limit beyond $14.3tn or face running out of money.

If this happens, the government would be unable to pay civil servants, government contractors, pensioners and holders of government debt.

A group of Republican and Democratic members of Congress led by Mr Biden had identified about $2tn in cuts in talks over May and June but those ended in an impasse.

Leaders from both parties are under pressure from rank and file members.

BBC