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In the debt ceiling debate, Obama warns of worst case scenario

U.S. President Barack Obama speaks in a rare prime-time address to the nation on July 25, 2011 from the East Room of the White House in Washington, D.C.

STACEY VANEK-SMITH: In a prime-time speech last night, President Barack Obama brought the debt ceiling debate into our living rooms -- saying some Republican lawmakers are being unreasonable and asking viewers to write their congressmen and push for a compromise. Republican Speaker of the House John Boehner got in some licks as well -- saying the president is asking for too much.

JOHN BOEHNER: And the sad truth is that the president wanted a blank check six months ago and he wants a blank check today. This is just not going to happen.

From Washington, David Gura has more.


DAVID GURA: The president went over the worst-case scenario, what would happen if the federal government defaults

BARACK OBAMA: We would risk sparking a deep economic crisis - one caused almost entirely by Washington.

There are two plans on the table now. Majority Leader Harry Reid's doesn't touch Social Security, Medicare, Medicaid or taxes. House Speaker John Boehner's plan would raise the debt limit in two stages. Now -- and again, in the spring -- if Congress can agree to deeper spending cuts. Last night, the president says he opposes that plan.

OBAMA: We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road.

But there's no guarantee either plan has enough votes to pass. And August 2nd is just a week away.

In Washington, I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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