US debt ceiling talks fold after Republican walkout

Speaker of the House John Boehner speaks during
his weekly press briefing on Capitol Hill
© AFP/Getty Images Mark Wilson

AFP

WASHINGTON (AFP) - Crucial high-level talks on raising the US borrowing limit collapsed Thursday after Republicans walked out, accusing the White House of provoking an impasse with demands to raise spending and taxes.

The move sparked fears that Congress will fail to raise the 14.29 trillion dollar debt ceiling by an August 2 deadline and cause the United States to default on its obligations, sending shockwaves through the global economy.

Republicans, who won the House of Representatives last November amid public anxiety over government debt, will only back raising the borrowing limit in return for steep cuts in the annual deficit set to hit 1.6 trillion this year.