Top senator: US reaching ‘brink of a default’

WASHINGTON – Democratic Senate Majority Leader Harry Reid accused Republicans late Saturday of pushing the United States to “the brink of a default” by resisting compromise in high-stakes budget talks.

“Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation,” Reid said in a statement.

His comments came after a marathon day of crisis negotiations at the White House and in Congress aimed at averting a catastrophic US debt default now just 10 days away by reaching a deal to narrow the yawning US budget deficit.

Reid signalled that a key sticking point in the talks, which aimed to tie an increase in the $14.3 trillion US debt limit to deep deficit-cutting measures, was whether the borrowing expansion would last through the 2012 elections.

“Anything less than that will fail to provide the certainty that the markets – and the world – are looking for, risking an immediate downgrade of America’s credit rating,” he said.

Reid’s comments came after a round of talks with Republican House Speaker John Boehner, Republican Senate Minority Leader Mitch McConnell and House Democratic Minority Leader Nancy Pelosi.

“I hope that Speaker Boehner and Leader McConnell will reconsider their intransigence,” he said.

Washington hit its debt ceiling on May 16 but has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to pay its bills and continue operating up to a fast-approaching August 2 deadline.

Finance and business leaders have warned failure to raise the US debt ceiling by then would send shockwaves through the world economy, while Obama has predicted a default would trigger economic “Armageddon.”