Washington braces for debt limit showdown

[WASHINGTON] The fight over the government shutdown quickly moved on Wednesday to a bigger showdown over raising the nation's debt ceiling, as the first White House talks to solve the fiscal standoff failed to make any progress.

President Barack Obama and business leaders warned that the clash has raised the chances of a historic default on the national debt, which would occur if Congress does not agree to raise the US$16.7 trillion debt limit later this month and could cause a new recession.

Mr Obama said investors should take more seriously the threat of a potential default, which global markets have brushed off for months as Washington's usual partisan theatrics.