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US in 'danger zone' on debt limit, says Obama aide
  • | AFP | June 30, 2011 09:49 PM

A senior aide to President Barack Obama warned on Thursday that the United States is in the "danger zone" as it rapidly approaches an August 2 deadline for raising the national debt ceiling.

David Plouffe, shown in 2008, a senior aide to President Barack Obama, warned that the United States is in the "danger zone" as it rapidly approaches an August 2 deadline for raising the national debt ceiling

White House senior advisor David Plouffe emphasized that the deadline is "a real date" set by Treasury Secretary Timothy Geithner.

"We\'re in the danger zone now," Plouffe told NBC\'s "Today" show.

While Plouffe said that there could be new guidance coming soon, an extension seemed unlikely.

"They\'re going to offer additional guidance tomorrow or next week. There\'s little debate that that\'s not going to change," he said.

The US Treasury has said that the nation could be forced to hold back payments on borrowings beginning August 2 if the debt cap is not raised.

Some Republicans, notably congresswoman Michele Bachmann, who this week officially announced her 2012 run for the White House, have contended that the Obama administration is using "scare tactics" in demanding a resolution by the early August deadline.

One senior Republican in the US Senate, Jon Kyl, told Fox News he had heard from unnamed sources that "it\'s likely they will move it back," potentially providing breathing room for lawmakers and the White House as they seek to hammer out a deal.

In a Wednesday press conference, Obama bluntly warned opposition Republicans that by August 2, the US government will "run out of tools to make sure that all our bills are paid. So that is a hard deadline."

He also urged Republicans, who are insisting that severe spending cuts accompany any debt deal, accept tax hikes for the rich in order to head off a debt default that would deal a "significant" blow to the economy.

In a populist and sarcastic swipe at his foes, Obama dismissed criticism that his own leadership was lacking, in a showdown over raising the government\'s $14.29 trillion borrowing authority.

He said his Democrats had accepted tough and painful spending cuts but lashed out at Republicans who he said were blocking his spending on education and health care to save tax breaks for oil firms and corporate jet owners.

The United States needs to increase the cap on borrowings to avoid defaulting on its debt and sparking "a severe shock to the economy and world financial markets," the International Monetary Fund warned Wednesday.

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