With the clock ticking toward a debt default deadline, politicians in Washington are still wasting precious time on finger-pointing, public showdowns and tough backdoor bargains to secure the best deal for their own parties -- a testament to the entrenched political divisiveness in the United States before the 2012 presidential election.

 SPIKING DEBT

 Experts held that the wars in Afghanistan and Iraq, former President George W. Bush's tax cuts, and economic stimulus measures under President Barack Obama to tide over the severe economic recession all contributed in a major way to the spiking U.S. national debt.

 The U.S. federal government's borrowing limit, currently at 14.29 trillion U.S. dollars, was reached on May 16. The Treasury Department said the nation would begin to default without an agreement to lift the limit by Aug. 2, as it would run out of maneuvering room to pay its bills.

 The debt limit is the total amount of money the U.S. government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.

 In a Monday night national presidential address, Obama reaffirmed Aug. 2 as the deadline, pressing Congress to take immediate measures to raise the federal government's borrowing capacity to stave off a debt default turmoil.

 Christine Lagarde, managing director of the International Monetary Fund, in New York Tuesday called on U.S. lawmakers to resolve the debt ceiling issue immediately and adopt a credible fiscal adjustment "sooner rather than later."

 CATASTROPHIC OUTCOMES

 Given the paramount influence of the United States on the world economy, many economists believe that an unprecedented debt default could rattle the global financial markets and risk a downgrade of the top-notch U.S. debt rating.

 The Treasury is projected to collect 172 billion dollars in revenue in August, falling far short of the 306 billion dollars of government obligations next month, according to a recent study by the Bipartisan Policy Center, a Washington-based think tank.

 U.S. Federal Reserve Chairman Ben Bernanke has warned several times that to use the debt ceiling talks as a political bargaining tool is a "dangerous game," as a default will push up the borrowing costs for U.S. businesses and families and deliver a "self-inflicted" wound to the world's largest economy.

 Lagarde Tuesday also cautioned that an adverse fiscal shock in the United States could have serious consequences for the rest of the world.

 Obama Monday noted that "the world is watching" the debt talk deadlock, and a debt default would cause interest rates on credit cards, mortgages and car loans to skyrocket and risk sparking another round of economic crisis.

 

UNWILLING TO BUDGE

 

Raising the U.S. federal debt ceiling has become a symbolic routine over the past decades, as the nation's credit card limit has been raised 74 times since 1962, including 18 times under President Ronald Reagan and seven times under President George W. Bush.

 But Republicans have held up increasing the borrowing limit this year to force the Obama administration to make steep cuts in government spending and honor their own mid-term election promises of smaller government.

 Obama wanted to raise the debt limit by a margin large enough to avoid another politically painful and sensitive vote before his November 2012 re-election bid.

 But the Republicans favored a two-stage solution. They are willing to raise the limit soon enough to avoid a default, but not big enough so they can retain check on the Obama administration before the next presidential election.

 With time running short, Obama said Monday that he supported a compromise plan put forward by Senate Majority Leader Harry Reid, a Democrat, although this plan excluded new revenues that Obama insisted last month should be part of any responsible debt reduction plan.

 The Reid plan aimed at raising the debt ceiling by 2.5 trillion dollars through 2012, and reducing the deficit by 2.7 trillion dollars over the next decade. But the plan has failed to garner enough Republican support so far.

 Minutes after Obama's speech Monday night, he received a harsh rebuttal from House Speaker John Boehner, a Republican, which highlighted the yawning gap between the two parties over the issue.

 Boehner said Obama was seeking another "blank check" this time and said he would not get it.

 Under the new two-stage plan favored by Republicans, the Congress would immediately raise the debt ceiling by 1 trillion dollars extending to early next year in exchange for 1.2 trillion dollars in government spending cuts. The plan would tie the second tranche of debt limit raising to the creation of a new bipartisan congressional committee to adopt more debt reduction moves.

 Experts say the new Republican plan aims at staging another budget showdown during next year's presidential campaign and has little hope of clearing the Democrat-controlled Senate. However, it is also difficult for the Reid plan to get the green light from the House in such a short time before next Tuesday's deadline.

 

COMPROMISE THE ONLY SOLUTION

 

Experts including Ron Haskins, a senior fellow at the Brookings Institution, believes that the Tea Party-backed Republicans have completely changed the conversation dynamics in the United States since they took over the House of Representatives last year, as they press hard for slashing government spending and rule out any major tax increases.

 The "My way or the highway" attitude of many Republicans has invited criticism both from home and abroad, as many believe political wrangling in Washington has hijacked the issue and stalled the talks.

 Haskins suggested Republicans seize the opportunity to seal a deal for the well-being of the U.S. economy, otherwise, they would also face the prospect of sharing a major part of the blame with Obama for causing irreparable damage to the U.S. economy.

 After Monday's partisan bickering, White House spokesman Jay Carney urged both parties to find common ground to solve the urgent debt ceiling problem, saying compromise was the "only option" for a two-party system and a divided government, in a bid to remove the economic uncertainty hovering over the nation and the world.

 Carney called on both parties to ditch ideological differences and find a bipartisan compromise to break the stalemate, ultimately reaching a deal not ideal for any party "except for the country."

 White House senior adviser David Plouffe said Tuesday that the Boehner and Reid plans had many similarities, and both parties should try to reach a compromise.

 

Xinhua