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 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 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.
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.
Sorry chad-called out the wrong person,my beginning statement should have been directed to Terri.
Hey Paula baby, who's your daddy?
ENOUGH IS ENOUGH
It is sad that a country so powerful and beautiful its going down the drain. Because of ignorant politicians that cant do a job that the people chose them to do. What a shame.
So charge every citizen regardless of income 25% people who haven't payed in to social security don't give it to them, make people with government assistance take a drug test if the fail don't give it to them, take away realistate tax sales tax and property tax charge another 5% for that and give it to the state of residence, charge corporations 35% and do away with all tax breaks, and then take the 25% and divide it up however u need too. And chrage the immigrants who come over here and open a business taxes too regardless unjust charge it don't.give breaks too many loop holes, deductions fine but only provable ones such as expenses. Oh yea and do away with tax exepmtions for churches and non for profits thats the dumbmest thingnive ever heard of the make millions and.millions and give the higher ups big bonuses to show no profit yet they did make profit ans got away without paying taxes
I would vote for it. This country needs a major overhaul.
I would vote for it too!!! And for whoever asked who would pay for the drug tests our tax dollars of course but think of all the money they would save not having to give welfare to drug addicts that don't use it for what it is intended to be used for anyway
I tried that trying bla,me oba,ma but better stop messing wih america money get serious about business stop actimg like baby get job done for america people for it sad republican agtee on anything fighting rach other just do right by, the people god bless you all pray for president pray for all of you god bless you obama we still my presidemt keep
doing for al america people.
What do the "spending cuts" mean in terms of resulting job loss?
Depends on how deep the cuts are. Bigger cuts mean more job losses. More lost jobs means more people not paying income and payroll taxes and more spending for unemployment benefits.
Put your "political" differences aside and resolve this issue – the catastrophic mess that will result if you on not
resolve it, will be on your hands.
Why in the world would Iraq,Afghanistan or any other country adopt a type of government that is now in control of the USA?
Please, learn how to spell, Joe. Your ignorance makes me want to beg for increased school funding. By the way, who is going to pay for all the drug tests you want on welfare recipients?
Congress and Senate will still get paid even if the military does not.
Congress & senate should lose their pay first. They also should not be able to get the travel expenses for going home 3-5 times a month & lets really make them feel it my laying off all congressional/senate aides first. Our govt pays a forture for its politicians & they only have to do one term to get life time benefits. The new Tea Party members made sure they got their govt health coverage right away. Lets suddenly take away their health care, its happened to too many Americans, maybe they need to feel the same fear.
Congressional pay is a tiny drop in the bucket, on the order of 0.006% of the deficit. People need to stop obsessing over it and spend that time educating themselves about the issues involved.
TEA PARTY!!?? Just another reason to HATE tea. Real Americans drink coffee.
A British comedy trio in the 1970s used to song a song called 'I am a teapot'. It went: place one hand on your hip to make a handle, stick one in the air to make a spout, and then sway back and forth singing "I'm a teapot, I'm a teapot".
Isn't that telling?
Just read the international newspapers for once. The whole world is at the mercy of the TEA PARTY and they're wanting power !!! That's the name of your game, and it's coming to an end.
American, how are you being "victimized by our own government?"
Obama's rhetoric about not being able to guarantee senior citizens Social Security checks on the 3rd is disgraceful. Why does he not say, "gee i can't guarantee NPR and Planned Parenthood will get their checks on the 3rd!"
Congratulations!! The house is burning down around your ears, and you are worrying about the color of you curtains. Well Done!! I hope you have a fabulous day!! :}
You obviously have no grasp of what's going on here. What we spend on NPR and Planned Parenthood is insignificant compared to Social Security, the military, and health care. These three things alone consume all of our current revenues. Please educate yourself instead of just spouting uninformed partisan attacks.
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