Raise debt limit or face worse consequences: White House

"The consequences of failing to raise the debt ceiling would be Armageddon-like in terms of the economy -- the impact on interest rates, on job creation, on growth would be devastating," White House Press Secretary Jay Carney told reporters at his daily news conference.

Congress must raise the USD 14.29 trillion US debt limit, or the maximum amount the Treasury is allowed to borrow, by May 16 or the US will default on interest payments of its debt. The move has become embroiled in fiercely partisan battles over the economy and spending.

Republicans who control the House of Representatives are demanding vast new spending cuts from US President Barack Obama -- above the USD 38 billion agreed to end the budget row last week.

"He (the US President Barack Obama) realises now that raising the debt ceiling is so important to the health of this economy and the global economy that it is not a vote that, even when you are protesting an administration's policies, you can play around with," he said.

"We believe that we should move quickly to raise the debt limit and we support a clean piece of legislation to do that," Carney said.  The White House said the global confidence in the US economy would be hit.

Obama is scheduled to deliver a major policy speech on debt reduction.
"He looks forward to working together with members of Congress in both parties to find a resolution to our long-term fiscal issues that is bipartisan and can be supported by the American people and that is good for the American economy and the American people," the spokesperson said.

"He believes, separately we should raise the debt limit so that all the good work that has been done to move this economy forward, to create an atmosphere now where we are growing regularly quarter by quarter, where we are creating jobs month by month that progress is not put into jeopardy because that is what would happen if we were not to raise the debt ceiling," Carney said.

The official argued Obama is committed to deficit reduction.
"The dangerous thing would be to hold hostage the simple raising of the debt limit, which everyone agrees has to be done regardless," he said as he referred to the statement of the House of Representative Speaker John Boehner that there's "not a chance" the debt ceiling will be raised without significant spending cuts attached.