27 Sep 2013

US budget deadline looms

1:12 pm on 27 September 2013

The United States Government has just four days to pass a budget plan to keep the government running beyond September and avoid a historic default on debt.

Republicans in Congress have refused to give in to President Barack Obama's demands for straightforward bills.

In a speech in Maryland, Mr Obama warned the battle over the budget threatens stability across the globe.

"We are the world's bedrock economy, the world's currency of choice, the entire world looks to us to make sure that the world economy is stable, you don't mess with that," he said.

US stocks rose overnight and seems the market is not too concerned.

Mesirow Financial chief economist Diane Swonk says she is worried about the situation and thinks Wall Street believes Washington is crying wolf.

"The disconnect between Wall Street and Capitol Hill is quite large at this point in time," she says.

She says there is a feeling that the US has been through the same situation before and a default will not happen, but if it did, the market would fall apart.