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Obama: No deal on US debt ceiling

Barack Obama has hailed the last-minute deal that pulled America back from the "fiscal cliff", but warned that he "will not compromise" over his insistence that Congress lift the government debt ceiling.

The President said in his radio and internet address that the fiscal cliff deal, approved by Congress late on New Year's Day and signed on Thursday, raises tax on the wealthiest Americans while preventing a middle-class tax increase that could have thrown the economy back into recession.

With one crisis behind him, Mr Obama faces new battles in Congress over raising the country's 16.4 trillion-dollar (£10.2 trillion) borrowing limit, as well as scaling back more than 100 billion (£62.5bn) in automatic spending cuts for the military and domestic programmes. The cuts are delayed by two months under the compromise.

Politicians promise to replace those across-the-board cuts with more targeted steps that could take longer to implement.

Mr Obama, speaking from Hawaii, where he is on holiday with his family, said he was willing to consider more spending cuts and tax increases to reduce the deficit. But he said he would not compromise over lifting the debt ceiling.

The nation's credit rating was downgraded the last time politicians threatened inaction on the debt ceiling, in 2011.

"If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic," Mr Obama said. "Our families and our businesses cannot afford that dangerous game again."

If elected officials from both parties "focus on the interests of our country above the interests of party, I'm convinced we can cut spending and raise revenue in a manner that reduces our deficit and protects the middle class", he said.

In the Republican address, Rep Dave Camp of Michigan said that as attention again turned to the debt limit, "we must identify responsible ways to tackle Washington's wasteful spending".

Americans know that "when you have no more money in your account and your credit cards are maxed out, then the spending must stop", he said.


From Belfast Telegraph