Obama warns on debt ceiling risk

© AFP/File Brendan Smialowski

AFP

WASHINGTON (AFP) - President Barack Obama warned the United States risked plunging back into recession if a standoff over the US debt ceiling lingers, as a top Republican said he was ready to cut a deal.

The United States is due to hit the $14.29-trillion ceiling set by Congress on Monday, creating a cash crunch that puts the country's credit standing at risk as politicians battle over its long-term deficit.

"If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system," Obama warned at a CBS town hall meeting last week that was broadcast on Sunday.

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