US President Barack Obama has said fixing the country’s deficit does not require ‘anything radical’, just ‘tough choices’.
He said the country’s fiscal problems were not as bad as those in the EU and that the US was not like Greece or Portugal.
‘We simply need to make these tough choices and be willing to take on our (political) bases. And everybody knows it,’ he said.
Democrats and Republicans are currently in heated talks about the country’s economy, with both sides taking different views as to how to cut the deficit.
Republicans are threatening to block any attempts to raise the country’s debt ceiling - the amount it can borrow at any time – unless it gets spending reductions with no tax increases.
The party is also making a push for a 'balanced budget' amendment to the US constitution, which would require the government to only spend as much as it gained in taxes.
President Obama said it would be economic ‘Armageddon’ for the US to default on its debt, which is a possibility if the debt ceiling is not increased by 2 August.
He has said any deficit reduction plan needs to be a mix of tax increases as well as spending cuts, with tax breaks for wealthy Americans being singled out for criticism.
After five straight days of crisis talks ended yesterday without a clear solution, Mr Obama told a press conference that he had given top lawmakers 24 to 36 hours to talk to their rank and file and return to him with a plan.
Ratings agencies Moody's and Standard & Poor's have both warned that they may downgrade Washington's sterling AAA debt rating.
Leading US creditor China, Wall Street titan JPMorgan Chase and the Federal Reserve have also expressed alarm at the situation.
Standard & Poor said in a statement that it still thought a US default was unlikely but that the possibility was increasing slightly as talks continued to find a solution.
Mr Obama, who is running for re-election in November 2012, has rejected the idea of a stopgap or short-term agreement that would require the debt ceiling to be raised again next year.
'A short-term solution is not something I will sign', he said yesterday.