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COLUMBIA (WACH, AP) -- The White House is pushing for a grand bargain on raising the debt ceiling and cutting the nation's deficit while the clock is ticking.

The United States has a $14.3 trillion borrowing limit and lawmakers are trying to reach a roughly $4 trillion debt-reduction deal the latest in a rapid fire series of proposals aimed at increasing that borrowing limit before the August 2 deadlline.  If no action is taken by then the  nation will start defaulting on its loans.

The term debt ceiling might not resonate much on Main Street, South Carolina, but the debt debate raging in Washington is just as important there as it is in the Palmetto State.

"Just like an individual has a credit rating, a state has a credit rating," points out state treasurer Curtis Loftis. "And ours now is one of the highest you can have. If the federal government lowers their rating then ours goes lower as well."

That's a very real possibility according to Loftis. Earlier this week, Moody's investor service named South Carolina one of five states that could be put on review for a possible credit downgrade if the feds don't reach a deal on the debt ceiling by the August 2 deadline.

"So it effects the amount of money we can borrow, it affects how easy it is to borrow money and the interest rate. So it's a serious event," said Loftis.

So serious that the federal government would have to make drastic and immediate changes if the deadline is missed.

"If there isn't an increase in the debt ceiling the federal government is going to have to start making some deep cuts in federal spending," said USC economist William Hauk.

That could have a very real impact on the average person according to Hauk. Unemployment insurance could be in jeopardy, which is bad news for a state with a 10.5 percent jobless rate. Alos, anyone on government programs like social security and Medicaid would be impacted.

"One way or the other the ceiling will have to be raised," said Hauk. "The government overnight would have to cut 40 percent of all federal spending. I don't think there's a way you can do that in this economy."

An economy that experts say can't stand another hit in South Carolina or anywhere.

The White House initially said Friday was the deadline for Congress to reach a deal on raising the debt ceiling and cutting the deficit. However, they changed that date on Thursday, saying August 2 is now the only date that matters.