Having failed to convince the Republican lawmakers to agree on a consensus on the debt issue, US President Barack Obama appeared on television to ask his countrymen to pressure the Congressmen to avoid a potentially devastating default.
"The American people may have voted for divided government, but they didn't vote for a dysfunctional government. So I'm asking you all to make your voice heard.
"If you want a balanced approach to reducing the deficit, let your member of Congress know.
"If you believe we can solve this problem through compromise, send that message," Obama told his countrymen in a nationally televised speech.
Obama took this decision to address the nation -- his seventh prime time address -- after weeks of negotiations with the Republican leaders failed to arrive at an agreement on resolving the issue of increasing the debt ceiling, failing which the US could default on its international obligations and could have devastating consequences on the American people, besides its adverse impact on global economy.
Putting this blame squarely on the Republicans, Obama said unfortunately, for the past several weeks, 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 them agree to their deep, spending cuts-only approach.
"If that happens, and we default, we would not have enough money to pay all of our bills -- bills that include monthly Social Security checks, veterans' benefits, and the government contracts we've signed with thousands of businesses," he said.
"For the first time in history, our country's AAA credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet.
"Interest rates would skyrocket on credit cards, on mortgages and on car loans, which amounts to a huge tax hike on the American people. We would risk sparking a deep economic crisis -- this one caused almost entirely by Washington," he said on Monday.
"So defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree we must avoid default.
But the new approach that Speaker (of the House of Representatives John) Boehner unveiled on Monday, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now.
"In other words, it doesn't solve the problem," he said.
"A six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result.
"We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road," Obama said.
"But there's an even greater danger to this approach. Based on what we've seen these past few weeks, we know what to expect six months from now.
"The House of Representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach," Obama said.
"Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions.
"Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way," he said.
"Congress now has one week left to act, and there are still paths forward.
"The Senate has introduced a plan to avoid default, which makes a down payment on deficit reduction and ensures that we don't have to go through this again in six months," Obama said.
Image: Barack Obama
