US debt rises to $16trn

But opinion polls suggest that Democrat President Barack Obama may still have the last laugh come presidential elections in October.

Rightwingers have been trying to paint the current president as a spendthrift and have been demanding big EU-style cutbacks in the face of the massive debt - much of it inherited from last Republican president George W Bush.

Republican Congressman Eric Cantor said following Tuesday's figures: "We can no longer push off the tough decisions until tomorrow.

He said the US needed to "stop spending money we don't have."

But Mr Cantor was among those who shot down attempts to strike a deal on the budget that would have raised taxes on the richest.

Republican presidential candidate Mitt Romney has said he'll cut hard if he wins, balancing the budget by 2020 - something long demanded by the rabid Tea Party right.

But President Obama has said he'll push again for taxes on the highest earners if he wins a second term.

And the economic debate was at the centre of his campaign launch in North Carolina on Tuesday.

The three-day event is expected to see Democrats paint Romney as a privileged businessman who is disconnected from ordinary people.

The US is able to run up such massive debts without facing economic ruin in part because the dollar remains in demand as a key trading currency for commodities such as oil and reserves.