US debt crisis threatens global markets as Congress is locked in blame game

Democrats and Republicans are locked into a dangerous game of seeing who will crack first over the national debt crisis, with the White House warning that the next few days could be stressful for world markets and Americans.

With time running out, congressional leaders from both sides met on Saturday after the dramatic collapse of negotiations between Barack Obama and the House Republican leader, John Boehner, on Friday. But the congressional talks broke up late on Saturday night after failing to make progress.

The White House chief of staff, Bill Daley, interviewed on Sunday on CBS, predicted that the next few days will be tense. "In the end, we may have a few stressful days coming up - stressful for the markets of the world and the American people."
In an effort to reassure markets reopening after the weekend, he claimed he was confident a deal would be reached before the 2 August deadline. The White House refused to discuss what contingency planning is taking place in the event no compromise.
Obama is no longer directly involved in the negotiations following the sudden deterioration in his relationship with Boehner, who, in a breach of Washington etiquette, refused to return the president's phone callson Friday. But Obama will remain engaged behind the scenes, and has left his diary for Tuesday, Wednesday and Thursday virtually clear. The Republicans and Democrats have been trying to ensure the other will be blamed by voters if it all goes wrong. The Republicans accused Obama, when a deal was close on Thursday night, of adding extra bits, in particular tax rises.