Fox: Obama Telling Banks US Won't Default

Monday, 25 Jul 2011 06:59 PM

By Newsmax Wires

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Although the White House has been issuing dire warnings should the country default on its obligations Aug. 2,  President Barack Obama has been privately telling Wall Street that default isn't going to happen, Fox News reports.

Obama has been calling the top execs at major banks telling them the "administration will not allow a default to happen even if the debt cap isn't raised by the Aug. 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders," Fox reports.

Both Geithner and Obama have been saying default is imminent if the ceiling isn't raised.

While both Republicans and Democrats are crafting plans they hope will appease party loyalists in both chambers, the negotiations have stalled.
Yet, even if there is a deal, lawmakers worry that the U.S. credit debt rating will be downgraded, possibly diminishing any savings on any plan.

Major ratings firms -- primarily Standard & Poor's and Moody's -- have said the US triple-A rating is likely to be downgraded regardless of what happens Aug. 2, to a double-A rating.


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