Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


White House: Default will damage democracy

07 October 2013, 19:05

Washington - The White House warned on Monday that the idea of a self-inflicted national default was "a terrible" scenario that would damage America's democracy, credit and global standing for years.

Top officials somberly warned there was no other plan than for Republicans to raise the $16.7 trillion US borrowing limit by 17 October.

They pushed back strongly a day after House Speaker John Boehner warned he would not raise the debt ceiling unless President Barack Obama made significant political concessions.

A refusal by Congress to raise the debt ceiling would trigger such dire economic consequences that many observers believe top leaders would blink before it came to pass.

But the nightmare scenario is growing in credibility, with Obama and House Republicans estranged over the current government shutdown and with the 17 October deadline approaching.

"I don't think there were many people who weren't disappointed in the Speaker's comments yesterday," said Gene Sperling, Director of the National Economic Council.

Sperling warned that Obama could not allow the House of Representatives to hold him hostage over raising the debt limit because it would set a dire precedent for future presidents.

"The president has made clear the era of threatening default has to be over," Sperling said at a breakfast hosted by the Politico news organization.

"If we sanction that as a regular process, that will do great harm to our democracy, great harm to our economy, great harm to the full faith and credit of the United States," he said, adding that a debt default would be "unthinkable".

Obama is refusing to negotiate with Boehner on raising the debt ceiling, saying Congress has a duty to pay bills already run up by lawmakers.

If the government loses its borrowing authority on 17 October, it will begin to default on its debts for the first time in history.

Many observers believe the US economy could be thrown back into a disastrous recession, that contagion could spread across the globe and that stock markets would go into meltdown.

Boehner told ABC News on Sunday that his Republican-controlled House would not raise the US debt ceiling without concessions from the White House.

"We're not going to pass a clean debt limit increase," Boehner said.

"I told the president, there's no way we're going to pass one. The votes are not in the House to pass a clean debt limit. And the president is risking default by not having a conversation with us."

But Jason Furman, chairperson of the president's Council of Economic Advisors, warned "the only plan here" was for Congress to raise the debt ceiling.

He said the consequence of default were "too terrible a thing to even talk about.

"We've never actually tested it, we don't know what happens."


Tags us

Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...