Debt debate: Where things stand
The debt ceiling plan proposed by Senate Majority Leader Harry Reid was rejected by the GOP-controlled House on Saturday.
July 31st, 2011
10:09 AM ET

Debt debate: Where things stand

Sunday morning there was news that there could be a deal struck on the fight over the debt ceiling, which is nearing a deadline on August 2.

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 default could cause Americans to face rising interest rates. It 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?

HOUSE

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.

SENATE

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 to 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 trillion 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.

PRESIDENT OBAMA

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.

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Filed under: Budget • Economy • John Boehner • Politics
soundoff (63 Responses)
  1. Sylvia

    Dear CNN: Ssssssssssssstop your wanton doom and gloom reporting. It's shameful. >.< I'm watching your coverage broadcast here in Serbia, and I'd be willing to bet you're praying for my country to fail under the desk. Your network is a joke.

    July 31, 2011 at 2:12 pm | Report abuse |
  2. CNN's Ashley Fantz

    i got to feed my kids. doom and gloom keep's me in business.

    July 31, 2011 at 2:19 pm | Report abuse |
    • Bella

      My opinion and observance is: I am unbelievably amazed with the bull crap! President Obama needs to raise the taxes for certain individuals and businesses! How dare the American people say NO Don’t raise taxes! What a bunch of idiots! Is it fair for a person making $30,000 to pay more taxes than a person or company making $200,000? No it’s not fair! It’s only common sense that more taxes should be paid if you make more money! I say it’s only common sense, but that’s the problem- Greedy, selfish people do not have common sense! It's not fair; it's appallingly unfair! The rich should pay more taxes, because the rich get more from the government. Taxes are really paid by the middle class (if there is such a class anymore, though I really doubt it! And- people need to cut the crap about “money/wealth trickling down to the middle or poor class. It’s not trickling down, because the greedy has plugged the faucet! Nothing is going through. Its backing up- back into the sink (pockets/bank of the rich) who some do not give a darn about the financial status of the middle or poor class! This is such crap, and the republicans should be ashamed of themselves for this evil practice. Which states get the most benefits back from taxes- western and southern states that vote Republican and the northeastern states that vote Democratic? It is true- those who whine the most about taxes are those who are unfairly taking advantage of the tax breaks! Unless I have missed it- I have never seen a poll to find out if the rich are willing to pay more taxes. It’s only the most humanist act of common sense- pay the taxes. My God what is wrong with people! I see why other countries look at us as if some of us are the most selfish evil people that walk the face of the earth! I believe President Obama is truly trying to make a difference, but he is continually met with resistance- and yes, a lot of this is because of the color of his skin! We Americans- supposedly God fearing people know this is true! Our country has fallen to a new lowest of low. It’s amazing there wasn’t opposition from the loud mouths when there was an announcement of “weapons of mass destruction”, wasting tax money and sacrificing the lives of our families/soldiers! President Obama inherited a hot mess! This president can’t get people together to hear and listen in order to come up with an achievable and successful plan to get this country back on track. What a disrespectful nation. My prayer is that God looks on all the people in Government that were voted in to make a positive and fair difference for all people- to be treated by God according to the condition of their heart! If that person’s goal was to go to Washington in order to oppose logic change or if it was a personal vendetta of hate or dislike- may the wrath of God fall heavily upon their heads and their descendants! Enough is enough! Do unto others as you would have them to do into you! Stop the bull crap! If President Obama fails- we All fail!!!

      July 31, 2011 at 4:23 pm | Report abuse |
    • Chow Below

      @Bella: You know who makes $200k a year? People who worked hard and deserve it. We agree that some people need to pay more (Bailout execs and outsourcing companies), but many people who make $200k a year are usually very productive and hard working. Nobody is stating the real causes for the tax problems and they are the 8 million lost jobs, and the escaping of financial obligations by certain companies. Fix that and you'll get the needed revenue.

      July 31, 2011 at 5:13 pm | Report abuse |
    • Chow Below

      @Bella: You know who makes $200k a year? People who worked hard and deserve it. We agree that some people need to pay more (Bailout execs and outsourcing companies), but many people who make $200k a year are usually very productive and hard working. Nobody is stating the real causes for the tax problems and they are the 8 million lost jobs, and the escaping of financial obligations by certain companies. Fix that and you'll get the needed revenue.........

      July 31, 2011 at 5:14 pm | Report abuse |
    • Easy Tartar

      Paying a "fair share" of taxes is not only good sense it is the law – the entire tax code is designed to point people to where to put their money to benefit the general theme of the code (right or wrong but ammendable) and to build a case for the fair share distribution of what taxes and how much to pay. The Bush tax cuts – now extended – is taking billions out of the general fund every month. A good 1/3 rd of the stimulus funds went to enable the continuation of those tax cuts to the very rich If we would end them a retro it back to 01Jan11, a couple of trillion would flow into the general fund and on to the future. Even if the minimum cut off was a million bucks, the revenue would still be substantial. Now who is paying these Republicans who can't digest this and the munchkins that bow to this idea are either absolutely blinded by the ideology, simply lost, or really want to destroy the country bercause we have a black President and they have some real soul searching to do. It is not politics, recovery starts with being fair to all to share the pain equally.

      July 31, 2011 at 8:56 pm | Report abuse |
  3. gung hoe

    You idiots dont like to drive do you must live in NYcity Sell alaska get real you realize how much energy the lower 48 gets from alaska Now complaining about republicans takin care of big buissness well guess what if that big buissness dont have a incentive to employ you your not going to have a job oh geez thats what has happened since obama took office And you want to blame the tea party learn what the tea party stands for if youre a working person you might be surprised they stand for your tax dollars you idiots

    July 31, 2011 at 2:49 pm | Report abuse |
  4. RUFFNUTT

    Taxe Enuff Areadly..=tea
    .
    j-pan and china gets all that oil outta alaska..we dont see any of it...

    July 31, 2011 at 2:55 pm | Report abuse |
  5. Lol

    They stand for THEIR tax dollars and the people handing them money as campaign backers. By the way, learn the differences between "your" and "you're", as well as proper punction. You may be dangerous in this world if you do. XD

    July 31, 2011 at 2:59 pm | Report abuse |
  6. Lol

    Bush is a professional at bleeding out successfu businesses for a personal profit. Are you surprised that we're this far in debt? I wonder if Palin's daughter receives welfare benefits since she's a singe, teenaged-mother and all.... XD

    July 31, 2011 at 3:02 pm | Report abuse |
  7. jj

    ishkabibble!

    July 31, 2011 at 4:15 pm | Report abuse |
  8. California Conservative

    House has passed 3 bills now. What have the democrats passed besides gas?

    The party of obstruction needs to stop their childish little games and do their job.

    Even if/when they pass a bill Obama has CLEARLY failed America.

    July 31, 2011 at 4:15 pm | Report abuse |
  9. jj

    ishkabibble! love that word too madam hee hee

    July 31, 2011 at 4:16 pm | Report abuse |
  10. California Conservative

    Democrats continue their tactics of ridiculing their opposition while expecting civil discourse.

    WON'T HAPPEN.

    GOD BLESS THE TEA PARTY

    July 31, 2011 at 4:18 pm | Report abuse |
  11. jj

    RON HOWARD DIED http://www.youtube.com/watch?v=9IjUlrjICRs RON HOWARD DIED

    July 31, 2011 at 4:19 pm | Report abuse |
  12. pmk1953

    The people who run the bank for international settlements have decided that the wages in the US should be driven down to chinese levels. When they accomplish that, companies will again hire here. Until then, nothing!

    July 31, 2011 at 6:12 pm | Report abuse |
  13. gung hoe

    Hey LOL i have a idea take a listen to this ok first and formost you my friend are dealing with someone with a IQ of 148 so if you care to match wits you disrespectful punk please respond that is if you are able to read my writing with a lack of punctuation but really its not my fault its not that i dont know how to use it remember IQ IDIOT so if you can get on mommy and daddys computer please respond if its not past your bedtime LOL YOU IDIOT PUNK

    July 31, 2011 at 6:17 pm | Report abuse |
  14. gung hoe

    Hey bella boy the democrats certainly has got you blindfolded first of all your president obamas objective when he took office was to fail because you see miss bella if obama fails then he has succeeded when obama got elected it was on a platform of hope and change i know the hope and change that you thought he was talking about but please have a open enough mind to at least consider this version hope hope to completely destroy the USA as it is known now and change please remember obama Is
    a muslim change the USA from a christian nation to a muslim nation he has proven himself a racist its not me who sat in that pew and listened to that racist minister did or would you

    July 31, 2011 at 6:50 pm | Report abuse |
  15. Rochelle

    I have just contacted Walmart headquarters to inquire if I can pitch a tent on their parking lot if I do not receive my social security check on August 17th.

    July 31, 2011 at 7:30 pm | Report abuse |
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