No resolution to US debt talks. says Obama

PRESIDENT Barack Obama held crunch talks with congressional leaders yesterday in an attempt to hammer out a deal to avert a US government default.

The White House has until 2 August to broker an agreement that would allow America to raise its national borrowing above a $14.3 trillion (8.7 trillion) debt ceiling. Without an increase, the country could face "Armageddon-like" economic consequences, the US Treasury has warned.

But despite the impending deadline, talks have stalled in recent weeks, with Republicans insisting on trillions of dollars of spending cuts while refusing to discuss tax increases as a way of balancing the budget.

Earlier this week Mr Obama accused conservative members of using the debt ceiling issue as a "gun against the heads of the American people to extract tax breaks for corporate jet owners or oil and gas companies".

But after yesterday's meeting behind closed doors, the president adopted a more conciliatory tone, praising party leaders on both sides for engaging in "frank" and "constructive" discussion. However, he conceded Republican and Democrat positions were still "far apart on a wide range of issues".