WASHINGTON, July 9, 2011 (AFP) - US President Barack Obama urged Democrats and Republicans Saturday to take a "balanced approach" to cutting deficit before a new round of key talks aimed at averting a debt default.
Obama said the two parties must address challenges like the solvency of Medicare, a government-run health insurance program for seniors and also insisted on closing tax loopholes and deductions for the wealthiest Americans.
"I believe we need a balanced approach," Obama said in his weekly radio address. "That means taking on spending in our domestic programs and our defense programs."
He acknowledged that "real differences in approach" continued to divide Democrats and Republicans but expressed confidence the two sides would be able to find a solution.
"We agree that after a decade of racking up deficits and debt, we finally need to get our fiscal house in order. We agree that to do that, both sides are going to have to step outside their comfort zones and make some political sacrifices."
"And we agree that we simply cannot afford to default on our national obligations for the first time in our history; that we need to uphold the full faith and credit of the United States of America."
The US government reached its debt limit of $14.29 trillion in May and since then the Treasury Department has used special measures to allow the government to keep paying its bills.
But unless the limit is raised by August 2, the Treasury says, growing spending and debt service commitments will force a default, which would have disastrous ripple effects throughout the global financial system.
The president was due to hold a fresh round of negotiations at the White House around dinnertime Sunday with top Republicans, including House Speaker John Boehner, in a bid to find a path to a debt-limit deal.