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White House debt meeting postponed White House debt meeting postponed
(about 1 hour later)
The White House says talks on raising the US debt limit before it expires this week have been delayed to allow lawmakers more time to reach a deal. White House talks on raising the US debt limit before it expires this week have been delayed to allow lawmakers more time to hammer out a deal.
Democratic and Republican lawmakers are also at loggerheads over a partial government shutdown, which is now in its third week.Democratic and Republican lawmakers are also at loggerheads over a partial government shutdown, which is now in its third week.
President Barack Obama warned that a US debt default would be "potentially devastating" for the economy. But congressional leaders say there has been progress in their negotiations to find a way out of the impasse.
The IMF says that would trigger economic turbulence around the world.The IMF says that would trigger economic turbulence around the world.
On Thursday, the US must raise its $16.7tn (£10.5tn) borrowing limit or risk default on its debt.
In a statement, the White House said Monday afternoon's meeting had been postponed to "allow leaders in the Senate time to continue making important progress towards a solution that raises the debt limit and reopens the government".In a statement, the White House said Monday afternoon's meeting had been postponed to "allow leaders in the Senate time to continue making important progress towards a solution that raises the debt limit and reopens the government".
The meeting was not immediately rescheduled.The meeting was not immediately rescheduled.
President Obama sounded his own warning as he toured a soup kitchen for the poor in Washington DC earlier on Monday. 'Potentially devastating'
According to US media, congressional leaders are discussing a deal to fund the government until 15 January and raise the debt ceiling until around mid-February.
President Barack Obama sounded his own warning as he toured a soup kitchen for the poor in Washington DC earlier on Monday.
"This week if we don't start making some real progress, both the House and the Senate - and if Republicans aren't willing to set aside their partisan concerns in order to do what's right for the country - we stand a good chance of defaulting," he said."This week if we don't start making some real progress, both the House and the Senate - and if Republicans aren't willing to set aside their partisan concerns in order to do what's right for the country - we stand a good chance of defaulting," he said.
"And defaulting would have a potentially devastating effect on our economy.""And defaulting would have a potentially devastating effect on our economy."
But Mr Obama said he saw "some progress" in the talks, ahead of Thursday's deadline for the US to raise its $16.7tn (£10.5tn) borrowing limit or risk default on its debt. Expected to attend the White House meeting were President Obama, Vice-President Joe Biden, Senate Democratic Majority Leader Harry Reid, Senate Republican Minority Leader Mitch McConnell, Republican House Speaker John Boehner and House Democratic Minority Leader Nancy Pelosi.
Expected to attend the White House meeting had been President Obama, Vice-President Joe Biden, Senate Democratic Majority Leader Harry Reid, Senate Republican Minority Leader Mitch McConnell, Republican House Speaker John Boehner and House Democratic Minority Leader Nancy Pelosi. On Monday evening, Sen Reid said on the floor of the upper chamber that he and Sen McConnell had made "tremendous progress" towards a deal to raise the debt limit and reopen the government, but added: "We are not there yet."
On Monday, Mr Reid told the Senate he was "very optimistic we will reach an agreement". Mr McConnell also expressed optimism, following what he described as "a couple of very useful discussions" with the Democratic leader. Earlier, Sen McConnell also expressed optimism, following what he described as "a couple of very useful discussions" with the Democratic leader.
Republican Senator Susan Collins acknowledged the Senate did not have a finished agreement, but said senators were "making very good progress". A separate bipartisan group led by Republican Senator Susan Collins also met for several hours earlier in the day to discuss possible solutions, the Associated Press news agency reported.
A separate bipartisan group led by Ms Collins also met for several hours earlier in the day to discuss possible solutions, the Associated Press news agency reported. Congressional Democrats were said to be using the looming debt ceiling deadline as leverage to target previously enacted cuts to the US government budget.
Overreaching
Congressional Democrats are now said to be using the looming debt ceiling deadline as leverage to push back against previously enacted cuts to the US government budget.
Those deep military and domestic spending cuts, known as the "sequester", went into effect in January 2013 after Democrats and Republicans failed to reach a budget compromise.Those deep military and domestic spending cuts, known as the "sequester", went into effect in January 2013 after Democrats and Republicans failed to reach a budget compromise.
On Monday, Republican Senator Bob Corker said the Democrats were demanding too much.
"For about 48 hours now, the Democrats have overreached by wanting to spend more, unbelievably," he said in an interview with NBC's Today show.
"But I do sense that people are getting back on the right page here. And I do hope that by the end of the day we'll have an agreement that makes sense for our country."
Analysts say the Senate talks represent the last best hope for a debt deal before Thursday, after talks between the White House and the Republican-led House of Representatives collapsed last week.Analysts say the Senate talks represent the last best hope for a debt deal before Thursday, after talks between the White House and the Republican-led House of Representatives collapsed last week.
Government and private sector analysts have warned for weeks of the dire consequences should Congress fail to reach an agreement on raising the nation's debt ceiling.Government and private sector analysts have warned for weeks of the dire consequences should Congress fail to reach an agreement on raising the nation's debt ceiling.
The US treasury department has been using what are called "extraordinary measures" to pay the nation's bills since the nation reached its current debt limit in May.The US treasury department has been using what are called "extraordinary measures" to pay the nation's bills since the nation reached its current debt limit in May.
Those extraordinary measures will be exhausted by 17 October, US Treasury Secretary Jack Lew has said.Those extraordinary measures will be exhausted by 17 October, US Treasury Secretary Jack Lew has said.
He has said that letting debt ceiling negotiations run too close to the deadline "could be very dangerous", while financial sector leaders have warned a default would "ripple" through the world economy. A swathe of government services remain closed for business after Congress missed a 1 October deadline to pass a budget, with Congress unable to agree to a law to keep the government funded.
On Sunday, the head of the International Monetary Fund said defaulting on the nation's debt could tip the world into another recession.
"If there is that degree of disruption, that lack of certainty, that lack of trust in the US signature, it would mean massive disruption the world over," Christine Lagarde said in an interview with NBC's Meet the Press.
'Extortion'
Congress and President Obama have also failed to reach an agreement regarding a partial government shutdown, now in its third week.
A wide swath of government services closed for business after Congress missed a 1 October deadline to pass a budget, with Congress unable to agree to a law to keep the government funded.
Hundreds of thousands of federal employees were sent home and government offices closed.Hundreds of thousands of federal employees were sent home and government offices closed.
Republicans refused to approve a new budget unless President Obama agreed to delay or eliminate the funding of the Affordable Care Act, his signature healthcare reform law of 2010. Republicans would not approve a new budget unless President Obama agreed to delay or eliminate the funding of the Affordable Care Act, his signature healthcare reform law of 2010.
Mr Obama has refused to budge on the matter, accusing Republicans of "extortion" in using the shutdown and the nation's debt limit as leverage in negotiations.Mr Obama has refused to budge on the matter, accusing Republicans of "extortion" in using the shutdown and the nation's debt limit as leverage in negotiations.