Debt Default Warnings Grow More Ominous

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The budget stalemate in Washington could have serious implications for millions of Americans.

And the impact is being stressed even more after news that Moody's Investors Service and Standard & Poor's may downgrade the nation's credit rating if the debt ceiling isn't raised and bills aren't paid.

Investors are now on edge. Publicly, the tone is dire.

"That (a default) would create a huge financial calamity. It would affect everybody," Federal Reserve Chairman Ben Bernanke warned.

Republican Senate leader Mitch McConnell said Thursday he will not be a "tax collector" for President Barack Obama.

"He really gave three bad choices: higher taxes, smoke and mirrors, or default," McConnell said.

After a long meeting Wednesday, Obama was quoted as saying "enough is enough" as the deadlock appeared to deepen.

The standoff continues over how much to cut and whether or not to raise taxes.

Both sides agree that not raising the debt ceiling and forcing the Treasury Department to default on some of America's bills will hurt the economy -- and the warnings are becoming more ominous.

"A massive financial disaster that will sweep the world into global depression," Senate Majority Leader Harry Reid, R-Nev., said.

"No one wants to see the federal government walk away from our obligations, but at the same time we've got to do something about the underlying problem and that is spending," House Speaker John Boehner said.

The White House says the two sides have agreed on nearly $2 trillion in cuts.

Obama said members of Congress need to be willing to make tough decisions and take the political heat.

"Leaders should lead and we have to do the right thing here," White House Spokesman Jay Carney said.

As the debate continues and the August 2 deadline approaches, financial advisors are warning Americans to take a look at their own financial holdings.

"Not a better time than now to make sure that you're not overexposed to any one particular area that might get hit," Charles Schwab Chief Financial Analyst Liz Ann Sonders.

As anxiety in the financial world increases, President Obama is demanding negotiators to find more common ground by the end of the week.

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CBN News
Jennifer Wishon

Jennifer Wishon

CBN News White House Correspondent

Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico. Follow Jennifer on Twitter @JenniferWishon and "like" her at