US in debt deal showdown amid default fears

REPUBLICAN lawmakers yesterday challenged Democratic foes to vote for their debt plan or risk a calamitous US default, in an acrimonious, lengthy showdown now threatening the world’s fragile economy.

The House of Representatives was to vote last night on a two-step plan forged by Speaker John Boehner to raise the nation’s $14.3 trillion debt limit even though a majority of senators have vowed to block it and the White House has said it will veto the bill.

With only five days to go before an August 2 deadline when the US Treasury says it will no longer be able to borrow funds to pay its bills, stock markets remained nervous that a fragile economic recovery after the 2008 global financial crisis could be at risk.