A new economic crisis looms with disastrous effect if not averted, said Pres. Obama. This will cause delirious negative effect on global markets to go haywire.
Key government payments such as Social Security checks, veterans benefits, paychecks to troops, air traffic controllers, and the honoring of contracts with small businesses, etc. will possibly be delayed. Markets would go crazy and interest rates for those who want to borrow money would increase, said Pres. Obama. This gloomy picture of the American economy is seen to happen because of congress refusal to raise the debt limit beyond its current level of $16.4 trillion.
The president warned Monday that unless Republican lawmakers agree to raise the debt ceiling the country could face a new crisis with the ill effects cited above.
The Republicans reacted to the issue with haste but they ignored Obama’s demand to separate the spending debate from the debt ceiling The Republican’s reaction indicates a sign for the face-off to wage on.
Senate Minority Leader Mitch McConnell said that Pres. Obama and his allies should get serious about spending and the debt-limit debate is the appropriate time for it. He added that fellow Republicans should work with Obama to solve the problem.
House Speaker John Boehner acknowledged that the consequences of failing to raise the debt limit are real as well as the consequences of allowing our spending problem to go unresolved.
Boehner said that the House of Representatives which is controlled by the Republicans will pass legislation to control spending and meets US debt obligations and would insist the Democratic majority in the Senate to do the same.