President Obama Says Time is Running Out on a Debt Plan

With four days remaining until the United States hits its debt limit, President Barack Obama on Friday told deeply divided Republicans and Democrats to stop bickering and find a way “out of this mess.”

Obama said a deficit-reduction plan being advanced by the top Republican in Congress would be defeated in the Democratic-led Senate and was simply wasting time. He called for compromise and said both parties were not that far apart on spending cuts.

“There are plenty of ways out of this mess but we are almost out of time,” he said, warning that the country’s top-notch triple-A credit was at risk.

The United States will be unable to borrow money to pay its bills if Congress does not raise the debt limit by August 2. That could result in an unprecedented default that could push the already fragile economy back into recession.

Fears about the health of America’s economy multiplied on Friday after a government report showed weaker-than-expected growth in the second quarter, raising the risk of recession.

Obama spoke as Republican leaders scrambled to rescue their debt plan, which was thrown into doubt on Thursday night when some conservatives refused to back their leader’s legislation.

House of Representatives Speaker John Boehner’s failure to round up enough support exposed a rift in the Republican Party that could complicate efforts to reach a compromise to raise the U.S. debt ceiling before Tuesday’s deadline.

World leaders have been stunned by the dysfunction in Washington that has led the United States to the brink of default. World Bank President Robert Zoellick on Friday said the United States was playing with fire.