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Obama says US people cannot become collateral damage to Washington’s political warfare as national debt battle escalates The battle between Barack Obama and the Republicans over the national debt reached a new level on Monday night when both claimed slices of prime-time television to blame one another for the looming crisis. Obama, in a 15-minute address to the nation, finally took the option that his Democratic colleagues have long urged on him to identify as central to the problem the hardcore Republican members of Congress backed by the Tea Party movement. He portrayed them as ideologues who ran counter to the long American political tradition of compromise. With only a week left until the 2 August deadline that could see the US default for the first time in its history, Obama expressed dismay over the stand-off in Washington. “It is a dangerous game we’ve never played before, and we can’t afford to play it now. Not when the jobs and livelihoods of so many families are at stake. We can’t allow the American people to become collateral damage to Washington’s political warfare,” the president said. Obama accused the Republicans of using the raising of the debt ceiling, which he said was normally routine, as a lever to force the Democrats to agree to deep spending cuts that would hit the poorest in society while leaving the wealthiest unscathed. He rejected a Republican proposal stop-gap deal, saying it would only mean the Republicans returning again next year to use the same tactics to seek more cutbacks. The Republican leader in the House, John Boehner, went live on television within minutes of the president to deliver his own statement, saying the crisis was because the national debt is at a historic high and that Obama wanted a blank cheque for more spending and was not going to get it. The rhetorical gap between Obama and Boehner underlined why the markets were nervous yesterday. The markets continue to assume that a last-minute compromise will be reached, as usual in Washington, but their confidence is not as high as it was last week. Both the Democrats and Republicans say it is unthinkable for the US to default but time is running out fast to reach a compromise and get the necessary legislation passed by the House and Senate. Boehner and the Democratic leader in the Senate, Harry Reid, on Monday released rival proposals aimed at resolving the crisis. The two roughly agreed on the total amount of proposed cuts to debt over the next ten years, with Reid proposing $2.7trn and Boehner $3trn. Crucially too for the Republicans, Reid has dropped Democratic demands for tax rises for the wealthiest. One of the biggest differences is over timing, with Reid wanting the debt ceiling raised to a point where it will not be an issue until after next year’s White House election in November. Boehner wants only a short-term deal and to return to the issue again next summer. Obama, who earlier in the day threw his support behind the Reid plan, warned of the serious damage that will be caused to the US economy if the country defaults. “We would not have enough money to pay all of our bills – bills that include monthly social security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses,” he said. “For the first time in history, our country’s triple-A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, mortgages and car loans, which amounts to a huge tax hike on the American people.” He added that the present political manouevring in Washington “is no way to run the greatest country on earth”. American voters in last November’s Congressional elections had voted for checks and balances. “The American people may have voted for divided government, but they didn’t vote for a dysfunctional government,” the president said. He called on voters to write to their members of Congress to make their voices heard. In an oblique kick at the Republican hardliners, he said: “History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good.” Boehner, who walked away from negotiations with Obama last Friday, said he had made a sincere effort to work with him. “Unfortunately, the president would not take yes for an answer. Even when we thought we might be close on an agreement, the president’s demands changed,” Boehner, referring to Obama’s call for an extra $400bn in tax rises for the wealthiest. US economy Economics Global economy Barack Obama US Congress Democrats Republicans United States US politics Ewen MacAskill guardian.co.uk