US president Barack Obama remains opposed to a short term extension of the US borrowing limit without a bi-partisan deal on long-term deficit reduction, the White House has said.
White House press secretary Jay Carney also said Obama wholly supported the approach taken by a group of Democratic and Republican senators to cut the US deficit by $3.7 trillion through spending cuts and tax increases.
Facing a looming deadline to avoid a US default, Republican and Democratic lawmakers are working to combine elements of a plan to raise the debt ceiling with market-pleasing proposals to cut spending.
The new deficit reduction plan unveiled yesterday by a group of senators known as the 'Gang of Six,' offers a ray of hope in an increasingly grim standoff that has threatened the United States' top-notch credit rating.
Congress must approve an increase in the $14.3 trillion US debt ceiling by 2 Aug or the government will run out of money to pay its bills.
Congressional leaders are looking to the Gang of Six plan for a way out of the impasse.
A more modest proposal may be needed to avert default by 2 Aug, but the $3.75 trillion Gang of Six plan could help lawmakers reach a broader deal shortly after that to address long-term fiscal problems and alleviate credit raters' concerns.
Initial reaction was positive. Obama seized on the plan as a 'very significant step' yesterday and urged congressional leaders to start discussing it.
