President Obama lashed out at conservative members of the Republican Party this week for threatening to shut down the government unless the 2010 Affordable Care Act, better known as Obamacare, is repealed.
The U.S. government will go into default if it can't negotiate a way to avoid exceeding its $16.7 trillion debt limit in October, when the 2014 fiscal year begins.
A report published Monday by think tank RAND Corp. said the United States "still has the economic muscle" to shape part of the international agenda but its power could be diminished by debt.
"The principal basis for U.S. economic power is the size of the U.S. economy," C. Richard Neu, lead author of the report and a senior economist at RAND, said in a statement Monday.
RAND said U.S. influence at international institutions like the International Monetary Fund and World Bank is directly related to its economic strength. Nevertheless, Washington has managed to lead efforts in nuclear issues in Iran during the global economic meltdown, it said.
U.S. Treasury Secretary Jack Lew said Tuesday the U.S. government will lose focus "if some in Washington continue to create uncertainty about whether our political system can meet its basic responsibilities and avoid creating self-inflicted wounds to our economy."
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