With the debt ceiling deadline expected to expire in a little more than a month, White House Senior Advisor David Plouffe says, "We're in the danger zone now." Appearing on NBC's Today Show Thursday morning, Plouffe said the August 2nd deadline should be taken seriously.
Some on Capitol Hill have called the date a scare tactic to push a deal since Treasury Secretary Tim Geithner has extended the deadline three times in the past. "They're going to offer additional guidance, maybe as soon as tomorrow or early next week. And there's very little debate that it's going to change," says Plouffe.
On Wednesday, in his first news conference in almost three months, President Obama was asked if the August 2nd deadline is actually a final deadline. "By August 2nd, we run out of tools to make sure that all our bills are paid. So that is a hard deadline." The president said.
He compared the situation to a flashing yellow traffic light stressing the importance of the government living up to its financial responsibilities. "If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant and unpredictable. And that is not a good thing," president Obama warned.
The effect a default would have on the economy and financial markets is very unpredictable. Plouffe stressed the seriousness Thursday saying, "if the United States of America does not pay its bill it would have catastrophic consequences on the economy, it could affect things like Social Security checks, Veterans benefits, on and on."
While more than four weeks remain to strike a deal, the House of Representatives remains out of session until Tuesday and the Senate, for now, is scheduled to break for the July 4th holiday.
President Obama scolded congress, saying they should not be leaving the Capitol while there is so much important work to be done. "They're in one week, they're out one week. And then they're saying, Obama has got to step in. You need to be here. I've been here. I've been doing Afghanistan and bin Laden and the Greek crisis. You stay here. Let's get it done."