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Obama might accept short-term deal to lift debt limit: White House

20 July 2011 23:50 (UTC +04:00)

Baku-APA. U.S. President Barack Obama would accept a short-term deal to raise the country’s borrowing limit with precondition of a bigger deal to reduce the soaring deficit, according to White House spokesman Jay Carney on Wednesday, APA reports quoting Xinhua.

"We would not support a short-term extension absent an agreement to a larger deal," Carney said at a White House briefing, adding "if both sides agree to something significant, we will support the measures needed to finalize the details of that."

With an Aug. 2 deadline looming, Obama showed more gestures of compromise.

He once insisted on raising the 14.29-trillion U.S. debt limit by enough to avoid another politically painful vote before his November 2012 re-election bid.

"We need to meet, talk, consult, narrow down what our options are and figure out, in fairly short order, you know, which train we’re riding into the station," Carney said.

Obama was scheduled to meet Democratic and Republican leaders separately on Wednesday.

"There is still time to do something significant if all parties are willing to compromise" on a "balanced approach," Carney added.

The U.S. borrowing limit, currently at 14.29 trillion dollars, was reached on May 16 this year. U.S. Treasury Department said the country would default without an agreement to lift the limit by Aug. 2.

Republicans have refused to discuss any debt-reduction deal that includes higher taxes, while Democrats have rejected any deal based solely on spending cuts.

Obama has offered a 4-trillion-dollar deficit reduction deal including certain tax increase to add revenue and spending cut on social welfare programs. However, Republican leaders rejected the deal, insisting on no higher taxes on all Americans, including the rich.

Analysts expect that the two parties will compromise in the end, but they predict that no real deal will be reached until the last minute of negotiation.