Debt debate: Where things stand
Speaker John Boehner gives the thumbs-up Friday after the House voted 218-210 to approve his debt-ceiling measure.
July 30th, 2011
10:28 PM ET

Debt debate: Where things stand

The federal government has three days left to raise the nation's current $14.3 trillion debt ceiling, the Treasury Department said. Failure to do so will risk an unprecedented national default.

If the debt ceiling is not raised by Tuesday, Americans could face rising interest rates and a declining dollar, among other problems.

As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Some financial experts have warned of a downgrade of America's triple-A credit rating and a potential stock market crash.

Without an increase in the debt limit, the federal government will not be able to pay all of its bills next month. President Barack Obama recently indicated he can't guarantee Social Security checks will be mailed out on time. Other critical government programs could be endangered as well.

Where do things stand in the fight to raise the debt ceiling?

Senate

Senate Majority Leader Harry Reid, D-Nevada, temporarily stopped legislative consideration of his debt ceiling proposal late Saturday night, reversing an earlier decision to hold a key procedural vote on the measure by 1 a.m. ET Sunday.

Negotiations were still underway at the White House, Reid said. The vote will now be held at 1 p.m. ET on Sunday.

There are "many elements to be finalized" and still "a distance to go," Reid said. "We should give everyone as much room as possible to do their work."

The announcement comes a few hours after Reid denied claims from House Speaker John Boehner, R-Ohio, that progress was being made on a debt ceiling deal.

The Republicans "refuse to negotiate in good faith," Reid said. "The process has not been moved forward during this day."

The Democratic-led Senate on Friday blocked the Boehner plan from being considered, voting 59-41 to table the measure.

Under an amended version, it would reduce federal deficits over the next decade by $2.4 trillion while raising the debt ceiling by a similar amount - meeting the GOP's demand that total savings should at least equal any total debt ceiling hike.

Roughly $1 trillion in the savings are based on the planned U.S. withdrawals from military engagements in Afghanistan and Iraq.

Reid's plan also would establish a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee's proposals would be guaranteed a Senate vote with no amendments by the end of this year.

In addition, it incorporates a process proposed by Senate Minority Leader Mitch McConnell, R-Kentucky, that would give Obama the authority to raise the debt ceiling in two steps while providing Congress the opportunity to vote its disapproval.

House

House Speaker John Boehner expressed optimism Saturday that an agreement is near, despite the House's rejection of a plan proposed by Senate Majority Leader Harry Reid.

"In spite of our differences, we're dealing with reasonable, responsible people," Boehner said.

Senate Minority Leader Mitch McConnell, R-Kentucky, also said Saturday afternoon that he had talked to President Barack Obama and Vice President Joe Biden "within the last hour" and is "confident and optimistic" that there will be an "agreement within the very near future."

Earlier Saturday, the Republican-controlled House of Representatives rejected Reid's proposed debt ceiling plan in a sharply polarized 173-246 vote. Republicans unanimously opposed the measure while most Democrats backed it. GOP leaders conducted the vote on Reid's bill under rules requiring a two-thirds majority for passage, thereby ensuring its defeat.

The Republican-controlled House on Friday passed a proposal put forward by House Speaker John Boehner, R-Ohio, that seeks to raise the debt ceiling and cut government spending while requiring that Congress pass a balanced-budget amendment to the U.S. Constitution. The 218-210 vote was strictly on party lines. The vote had been scheduled to occur Thursday night, but Republican leaders postponed it because they lacked support within their own caucus to get it passed. After the House vote, the measure went to the Senate, where Democrats blocked it from being considered.

Boehner's plan calls for $917 billion in savings over the next decade, while creating a special congressional committee to recommend additional savings of $1.6 trillion or more. It would allow the debt ceiling to be increased by a total of roughly $2.5 trillion through two separate votes. The $2.5 trillion total would be enough to fund the federal government through the end of 2012.

The plan originally called for a congressional vote on a balanced-budget amendment to the Constitution by the end of the year. Boehner then reached out to disgruntled conservatives by amending the plan to require congressional passage of such an amendment as a condition for raising the debt limit by the full $2.5 trillion.

President Obama

Obama has endorsed Reid's plan and threatened a veto of Boehner's plan. The president strongly opposes any bill that doesn't raise the debt ceiling through the 2012 election, and he has promised to veto any short-term debt ceiling extension unless it paves the way for a "grand bargain" of more sweeping reforms and revenue increases.

On Friday, Obama urged Senate Democrats and Republicans to take the lead in congressional negotiations. He said the House GOP plan "has no chance of becoming law." Obama also urged Americans to keep contacting members of Congress in order "to keep the pressure on Washington."

The president made a nationally televised plea for compromise Monday night, though he also criticized Republicans for opposing any tax hikes on the wealthy.

No face-to-face negotiations are currently scheduled for Saturday.

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Filed under: Barack Obama • Harry Reid • John Boehner • Politics
soundoff (370 Responses)
  1. ARND

    We can all help to be part of the solution to the debt crisis. The Association to Reduce the National Debt (which was recently featured on CNN (you can find the link to the video on our website)) is a non-partisan, not-for-profit organization uniting Americans to help them be a part of the solution to the debt crisis. TOGETHER WE CAN MAKE A DIFFERENCE. Please join us in acting to help be a part of saving our nation from the debt crisis. This is an issue that affects ALL Americans, regardless of socio-economic status or party affiliation. We are hopeful that you will all join us in this American crusade to save our country. It does not take much – it takes your contributions and your helping to spread the word and get others to join with us.Find us on the web or facebook, join with us, contribute, and help spread the word. PLEASE JOIN US!

    July 31, 2011 at 8:36 am | Report abuse |
  2. Smart Economist

    Our inteligence is relative to that of our clients. When the average American investor loses money on the market for 17 years-running while we've been making cash hand-over-fist...well, we look purty smart. Relatively speaking.

    July 31, 2011 at 8:42 am | Report abuse |
  3. Shibu m l

    Let me go back a few years: 1. It was a REPUBLICAN majority that gave one of the largest tax breaks to the wealthiest of Americans back under president Bush under the pretext that it will lead to job creation. Well my fellow Americans you have been DECEIVED, it turned out the wealthy do not care about America as much as they do about their money, so they built their industries in China! 2. It was REPUBLICANS who started an Iraq war under the pretense of WMDs. Well my fellow Americans you have been DECEIVED, it turnes out Sadddam did not have WMDs. How many Trillons went in that drain? 3. It was REPUBLICANS who spearheaded (although in this thing the Democrats are not far behind) the opening up and deregulation of the financial markets under the pretense it will foster business growth. Well my fellow Americans you have been DECEIVED, it turnes out wall street is not made up of angels who would "self-regulate" as our leaders told us. They robbed YOU my fellow Americans even with out stepping inside your homes or bankes. Now the extreme right wing of the REPUBLICAN party called "TEA PARTY" have highjacked a common procedural vote that would give the Government the ability to pay the bills. The bills that have already been committed by the House and Senate. The ramifications of this is historical. It will result in the downgrade of American credit rating for the first time in history. Jeopardize the position of the Dollar as the reserve currency of the world. Bring down our whole economic system, arguably of the whole world to a certain extend. But these LUNATICS do not seem to care. Well why would they there is "no tax increase", right? I Agree with one thing they are saying and that is "they are just doing what they were send here to do". In other words America deserves this because it asked for it by electing these LUNATICS. So my fellow Americans the next time you go to the ballot box think carefully before you press the button. You might get even more than what you asked for 🙂

    July 31, 2011 at 8:50 am | Report abuse |
    • NaplesFL

      It doesn't matter. Keep an eye on late night news & you'll see a herd of smiling backslapping political types being featured all smies & telling you how they saved you from...their mismanagement.

      But no matter because all that new money has to be created (out of thin air) & where will it go? It will go to the weapons manufacturers, banks, etc. but not to anything that will help the people get out of this mess.

      July 31, 2011 at 9:17 am | Report abuse |
    • Txpharm

      You make good points about Republicans, but this is the fallout from democrats arrogant tyrannical passage of HCR without one republican vote and against the will of the American people. Obama appointed a bipartisan deficit commission 17 months ago, and made what I believe will be one of the biggest mistakes of his presidency: he ignored their advice completely, started demagouing Medicare and going after tax increases. Simpson/Bowles AND the Gang of Six, also bipartisan, recommend decreasing tax rates while getting rid of deductions that allow Obama, George W
      Bush, hedge fund managers to pay less tax than a professional couple. Obama blew a deal because he wanted to
      raise taxes on 250k per year, not exactly flying around in corporate jets after paying 90k in taxes. Most higher income people would be willing to pay higher taxes with assurance it would reduce the deficit. Looking at HCR and Democrats opposition to balanced budget amendment, that will not happen as long as they are in control. They are stuck in a 20th century pre globalization reality, still trying to emulate Euro welfare state even as we watch it implode.

      July 31, 2011 at 1:12 pm | Report abuse |
  4. michaelfury

    It's not the ceiling you need to worry about; it's the foundation.

    http://michaelfury.wordpress.com/2011/07/11/wrecking-ball/

    July 31, 2011 at 8:51 am | Report abuse |
  5. michaelfury

    http://michaelfury.wordpress.com/2011/07/30/truth-crushed-to-earth-shall-rise/

    July 31, 2011 at 8:53 am | Report abuse |
  6. NaplesFL

    Time to call for a Vote of No Confidence, disolve the Congress & have new elections.

    Oh wait, you can't do that. You have eternal elections & eternal wars.

    Too bad eh wot?

    July 31, 2011 at 9:13 am | Report abuse |
  7. Name*Vince

    Next election I'm voting out everyone who was involved in this budget game they played, I'm tired of being the patsey for these jerks

    July 31, 2011 at 9:27 am | Report abuse |
  8. P

    The spending spree is over. Now get back to work and do the job you where elected to do !

    July 31, 2011 at 9:28 am | Report abuse |
  9. Daniel Davis

    This is a big charade...just to cut the big 3 help to the middle class..social security...medicare...medicaid....why do the poor and old carry this on there back and not the corporations..and war profiteers.....we need a revolution....burn baby burn...

    July 31, 2011 at 9:39 am | Report abuse |
  10. Teresa Munoz

    Teresa Munoz

    I say we start getting rid of the waste in the White House! Why do these Men and Woman of the United States get to have Sunday off when the JOB is not done, Heck I would lose my job. We need to look at all the waste and get rid of it. We as voters need to look at this! I have one check book and mine is balanced every month as I'm sure alot of Americans do the same. We are asked to pay our bills all the time, So why is the White House even thinking of not paying there bills? I say do a 20% across the board tax bill for everyone, I say what we pay for to in port or export they meaning over seas pay the same! And why when we have a program out there we have to have another program out there to make sure the one we had first gets done? I say we bring home some of our Fine Americans over seas and start taking care of our own boarders! It's time to take care of waste and start saving. It does not take a Rocket Science to do this. I'll ever take my own time to help out with the BUDGET!!

    July 31, 2011 at 10:16 am | Report abuse |
  11. low price seo

    Time to call for a Vote of No Confidence he is right

    July 31, 2011 at 4:46 pm | Report abuse |
  12. TERROR ALERT

    EMERGENCY "GOVERNMENT SPONSORED TERROR" ALERT !!!

    REAL SHOOTING IN UTOYA or NORWEGIAN "AFTERLIFE" $$ FLASH MOB !!? http://stateofterror.blogspot.com/ or http://stateofterror.wordpress.com/ REAL TEARS OR TEAR GAS AND PURE THEATER ON FACES OF MANIACS !!? OSLO POLICE or COMMUNIST/LIBERAL CRIMINALS WHO WERE PREPARING FOR ACT OF TERROR AGAINST NORWAY AND EUROPE ALMOST HALF DECADE(collecting proofs and photos) AHEAD !!? WILL THERE BE APOCALYPSE NOW(total obedience or trans in abomination) OR TOTAL RESISTANCE(civil war against multyculturalism) !!? No doubt about bombing in Oslo, but what about shooting in Utoya !!!?

    ARIZONA = UTOYA and STOLTENBERG = BREIVIK (90 minutes vs 30 and for government vehicles or police even 20 minutes the most) !!!

    August 6, 2011 at 2:14 pm | Report abuse |
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