[Updated at 8:56 p.m.] President Barack Obama announced Sunday an agreement with congressional leaders would extend the federal debt ceiling and reduce deficits. The deal still needs to be approved in votes by the House and the Senate.
Cuts worth $1 trillion over 10 years would be enacted in the plan's first stage. In the second stage, a bipartisan commission would report back by November with suggested additional cuts - and potentially revenue increases - to address the nation's budget deficit.
"At this stage, everything will be on the table," Obama said of this second round of cuts.
Obama said the deal would ensure "that we will not face this kind of crisis in six months, in eight months, or in 12 months."FULL STORY
[Updated at 9:05 p.m. ET] Congressional leaders and the White House reached a tentative deal on raising the U.S. debt ceiling Sunday, but with votes still to come, there was still plenty to do beat Tuesday's deadline and prevent a possible national default. Here is a look at this and other stories that CNN plans to follow this week:
Deadline for debt deal is Tuesday
Raising the federal debt ceiling - so that the government can borrow more money to pay its bills - usually is a less dramatic event. But this year congressional Republicans have demanded that any vote be tied to a plan for reducing deficits through spending cuts. A deal was slow in coming, with Republicans saying Democrats were insisting on tax increases that Republicans opposed.
On Sunday night, President Barack Obama announced a deal with congressional leaders that would raise the debt ceiling and make spending cuts in two stages. Cuts worth about $1 trillion over 10 years would be enacted in the plan's first stage. In the second stage, a bipartisan commission would report back by November with suggested additional cuts - and potentially revenue increases - to address the nation's budget deficit. (Read details of plan.)
But without any final plan, the fierce tug-of-war between Democrats and the GOP over whether to raise the government's $14.3 trillion debt ceiling continues.
If the debt ceiling isn't raised, many, including President Barack Obama and the Treasury Department, warn that the country will risk unprecedented default. That defaultÂ could cause Americans to face rising interest rates. ItÂ could also mean that the value of the U.S. dollar would drop compared to other currencies. As interest rates increase, the cost of borrowing rises, so individual mortgages, car loans and student loans could become significantly more expensive. As individual Americans' personal finances take a possible hit, some financial experts have warned that America's AAA credit rating could also be downgraded, threatening an already drooping stock market.
Obama recently indicated he can't guarantee Social Security checks will be mailed out on time if the debt ceiling is not raised. Other critical government programs could be in jeopardy as well. Several CNN iReporters have weighed in on how the debt ceiling issue is affecting their lives. Here are a few answers to the big "What Ifs" of the debt debate compiled by Reuters, and linked out from CNN's Political Ticker and Candy's Crowley's Sunday show "State of the Union".
So where does America go from here? What lies ahead today and for the week?
The GOP-controlled House on Saturday rejected the debt ceiling plan proposed by Senate Majority Leader Harry Reid, D-Nevada. The plan was rejected 173-246; a two-thirds majority was required for passage. Most Democrats supported Reid's plan, while every Republican in the chamber rejected it. On Friday, the House passed a proposal put forward by 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 Senate then voted 59-41 to table Reid's bill, effectively killing it.
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.
Late Saturday night, Reid announced a 12-hour delay on a key procedural vote on his debt ceiling proposal. The vote to end debate and break a GOP filibuster will now be held at 1 p.m. ET Sunday, as opposed toÂ 1 a.m. Forty-three of 47 Senate Republicans signed a letter to Reid Saturday warning that they would not vote for his proposal as currently constituted.
Reid's plan 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 trillionÂ of the savings is 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 McConnell that would give Obama the authority to raise the debt ceiling in two steps while providing Congress the opportunity to vote its disapproval.
On Saturday at the White House, Obama met with Reid and House Minority Leader Nancy Pelosi, D-California.
The president has endorsed Reid's plan and threatened to veto Boehner's plan. Obama strongly opposes any bill that doesn't raise the debt ceiling through the 2012 election. 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.
An Iranian court is scheduled to issue a verdict within a week in the case of two American hikers detained in Iran, the hikers' lawyer Sunday.
Attorney Masoud Shafiei said Josh Fattal and Shane Bauer are innocent of charges that they illegally entered Iran as spies. The lawyer reiterated at a hearing Sunday that the Americans have maintained their innocence throughout months of imprisonment.
If the court reaches a guilty verdict, Shafiei said the time the two have spent in Iranian custody is enough.
"I believe that even if the court finds my clients guilty, the two years that they have already served in prison would be considered as their sentence and they would be released," he said. Sunday's hearing occurred two years to the date of their arrest while hiking near the country's border with Iraq.
Fattal and Bauer could be freed within a week of a court order, according to the lawyer.
"My clients should not be considered spies, because they lack the characteristics and backgrounds of spies," he said. The lawyer said he hoped his "clients will be dealt with according to Islamic compassion," given that their hearing falls on the second anniversary of their arrest and at the start of the holy month of Ramadan, the Iranian Students News Agency reported.
A suspected Taliban spy who worked at the Afghan Defense Ministry headquarters in Kabul has been arrested after allegedly leaking critical security information to insurgents, officials said Sunday.
Gul Mohammad was arrested last week following a month-long investigation that allegedly uncovered his plans to organize suicide attacks on key Afghan and international installations, according to National Directorate of Security spokesman Litfullah Mashal.
Among the locations to be targeted were the International Security Assistance Force headquarters and an NDS building as well as an Afghan military outpost and police station in Kabul.FULL STORY