Debt showdown continues in Washington

WASHINGTON - (AP) - President Barack Obama said Friday Congress has a "unique opportunity" to stabilize the U.S. economy for decades by cutting deficits and raising the national debt limit to avoid a first-ever default.

He warned starkly that failure to do so by the Aug. 2 deadlinewould effectively mean "a tax increase for everybody" if thegovernment defaults, sending up interest rates and likely sparkinga global financial crisis.

Still, Obama said that Republicans opposition to any new taxrevenue was complicating efforts to reach a deficit-cutting deal.

"If they show me a serious plan I'm ready to move," he said.

The United States hit its current $14.3 trillion debt ceiling inMay and has been juggling its books since then. Republicans, whocontrol the House of Representatives, say they won't raise the debtlimit unless Democrats agree to major spending cuts to reduce thespiraling U.S. deficit. Democrats say cuts must be accompanied bysome tax increases. Republicans, prodded by junior members backedby the small-government tea party movement, oppose any tax hikes.

The president spoke at the White House Friday after five daysstraight of meetings with congressional leaders failed to yieldcompromise, and amid increasingly urgent warnings from creditagencies and the financial sector about the risks of failing toraise the government's borrowing limit.

Democratic and Republican congressional leaders agree on theneed to avert that outcome, but that hasn't been enough to getRepublicans to agree to the tax hikes on corporations and thewealthy sought by Obama - or to convince Obama and Democrats tosign onto the steep entitlement cuts without new revenue thatRepublicans favor.

The president spoke at his third news conference in two weeks onan issue that is increasingly consuming Washington and hispresidency.

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