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President Obama news conference from the White House
President Barack Obama says Republicans and Democrats have agreed to prevent the US from defaulting on its debts, despite an ongoing budget dispute.
But lawmakers have a “unique opportunity” to stabilise US finances for decades to come, he added.
On Thursday a fifth consecutive day of cross-party talks at the White House between Mr Obama and congressional leaders failed to make a breakthrough.
The US must raise its $14.3tn (£8.9tn) debt ceiling to borrow beyond 2 August.
Failure to reach a deal would rattle a world economy still trying to put the 2008 downturn behind it, analysts say.
“I am confident that we can not only impress the financial markets, we can also impress the American people that this town can actually get something done once in a while,” the president said during a news conference at the White House on Friday.
‘Childish’
On Thursday, Standard & Poor’s became the second of the major credit rating agencies to place US debt under review, citing an increasing risk of a payment default.
Another ratings agency, Moody’s, warned a day earlier that it might cut Washington’s triple-A debt rating.
President Obama said that if congressional leaders could not “find agreement on the path forward” in the next 24-36 hours, the negotiations would have to continue into the weekend, according to Democratic and Republican aides.
US federal government debt
- US government currently runs a $1.5tn budget deficit, requiring it to issue debt in the form of treasury bills, bonds and other securities
- Public debt was $14.3tn on 31 May, up from $10.6tn when Mr Obama took office in January 2009
- Most is held by the public, with the rest held in US government accounts
- Congress has voted to raise the US debt limit 10 times since 2001
Sources: US Treasury, Congressional Research Service, Congressional Budget Office
The political impasse boiled over on Thursday to the Senate floor, where Majority Leader Harry Reid, a Democrat, called House Republican Leader Eric Cantor “childish”.
Mr Reid said Mr Cantor “has shown he shouldn’t even be at the table” in the debt talks at the White House.
Mr Cantor reportedly told President Obama during Wednesday evening’s negotiations that the tax rises sought by Democrats simply were not going to happen.
He is also said to have urged the president to accept a short-term deal instead of a budget that would carry through to the presidential election in November 2012.
That is said to have prompted Mr Obama to say: “Enough is enough… I’ll see you all tomorrow,” before leaving the room.
US Federal Reserve chairman chief Ben Bernanke warned a Senate panel on Wednesday that a default would cause a “major crisis”, adding it would be a “self-inflicted wound”.
President Obama needs the Republican-led House of Representatives and Democratic-held Senate to agree a deal to trim the US deficit, and allow Washington to borrow beyond the 2 August deadline.
He has said he is willing to countenance cuts to social safety-net programmes dear to Democrats if certain tax breaks are eliminated.
Republicans have rejected the latter proposal, saying that would stifle investment and job growth.
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Obama seeks end to debt showdown