Obama Makes Urgent Plea for Compromise on Debt Ceiling

In an eleventh hour plea for political compromise, as the Aug 2. debt ceiling deadline inches closer, President Barack Obama urged Congress to avoid a government default by finding a bipartisan solution. On Friday, he said he was ready to work with top Democrats and Republicans through the weekend to reach one.

"There are plenty of ways out of this mess, but we're almost out of time," Obama said at the White House.

Unless the $14.3 trillion debt ceiling is raised by Tuesday, the United States will lose its ability to borrow and start to run out of cash to pay its bills. This needs to be done, the president said, "so that our country will have the ability to pay its bills on time, as we always have. Bills that include monthly Social Security checks, veterans' benefits, and the government contracts we've signed with thousands of businesses."

Still, the president indicated he would accept a two-part plan to raise the debt ceiling, the second half to include tax reform and changed to entitlement programs Medicare, Medicaid and Social Security.

On Friday, House Speaker John Boehner, R-Ohio, hastily rewrote his stalled emergency debt-limit bill, yet again, as Senate Democratic Leader Harry Reid, D-Nevada, affirmed he is ready to push ahead with his own version.

"The power to solve this is in our hands on a day when we've been reminded how fragile the economy already is," the president said as many U.S. stocks fell in response to a negative economic growth report and doubt over a compromise on the Washington debt stalemate. "This is one burden we can lift ourselves. We can end it with a simple vote."

But getting a simple vote seems to be the biggest roadblock.

Boehner's plan doesn't have enough Democratic support to become law, according to the president, who said the Speaker's plan has no viable future.

"The House of Representatives is still trying to pass a bill that a majority of Republicans or Democrats in the Senate have already said they won't vote for. It's a plan that would force us to relive this crisis in just a few short months, holding our economy captive to Washington politics once again. In other words, it does not solve the problem, and it has no chance of becoming law," Obama said.

"What's clear now is that any solution to avoid default must be bipartisan. It must have the support of both parties that were sent here to represent the American people, not just one faction," he added, noting that the two sides are not miles apart on this issue.

Obama said he was confident a solution can be found, despite the danger of having the nation's credit rating lowered, which would result in higher interest rates amounting to tax hikes on Americans with home mortgages, car loans and credit cards, USA Today reported.

If this happened, it wouldn't be because "we didn't have the capacity to pay our bills; we do -- but because we didn't have a AAA political system to match our AAA credit rating," Obama said.

With just four days left, however, House Republicans said they would link a passage of a balanced-budget amendment to Boehner's newly revised debt ceiling plan, which GOP lawmakers say would move the measure to passage in a high-stakes vote later Friday, The Hill reported.

In his Senate speech Friday, Reid said he would work with McConnell on a deal that is "likely our last chance to save this nation from default."

"The question is, 'Will today's Republicans break away from the shrill voice of the Tea Party and return to the Republican Party of Ronald Reagan," Reid said.