July 25th, 2011
10:34 AM ET

Boehner, Reid to unveil new debt plans

Democratic and Republican congressional leaders are set to unveil new deficit reduction plans Monday as top officials scramble to bridge a cavernous partisan divide and raise the federal government's debt ceiling before an unprecedented - and potentially devastating - national default.

Senate Majority Leader Harry Reid, D-Nevada, is expected to outline a blueprint calling for roughly $2.7 trillion in spending cuts over the next decade while raising the debt limit by $2.4 trillion - an amount sufficient to fund the government through the 2012 election. Reid's plan would not require any new tax hikes or reforms to politically popular entitlement programs.

House Speaker John Boehner, R-Ohio, is expected to outline a two-stage plan. The first stage calls for approximately $1 trillion in spending cuts while raising the debt ceiling through the end of 2011, according to sources. The second stage would raise the debt limit through 2012, but tie the increase to major tax reforms and entitlement changes outlined by a special commission.

Democrats are vehemently opposed to the idea of holding more than one vote to the raise the debt limit through the 2012 election, arguing that such a requirement is politically unrealistic and could prove to be economically destabilizing. Republicans want to lock in long-term tax and spending changes, and argue that President Barack Obama is trying to avoid politically tough decisions in a presidential election year.

If Congress fails to raise the $14.3 trillion debt limit by August 2, 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.

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soundoff (44 Responses)
  1. Cesar

    Cutting all this useless and unnecessary military spending may not eliminate the huge deficit but it will put a gigantic hole in it! That is what the right-wing thugs on Capitol Hill deem unthinkable, unfortunately! We need to throw these charlatans out!!!

    July 25, 2011 at 10:59 am | Report abuse |
  2. Wisher

    Remember the financial coups performed by the Rothschilds in England in 1815, and in France three years later, are just two of the many they have staged.

    July 25, 2011 at 11:00 am | Report abuse |
  3. USABLOWS

    USA is crumbling financially under its own stupidity. Worlds biggest ghetto.

    July 25, 2011 at 11:09 am | Report abuse |
    • banasy

      Very well put, USABLOWS. I couldn't have said it better!

      July 25, 2011 at 11:35 am | Report abuse |
  4. Tommy1414

    Where is the plan from the President! He claims he has a plan – yet we see no specifics, we see no details. We do see a firm plan in CC and B. And the Senate did not even wish to debate it. Is that democracy – not even allowing for a debate. And the President is the worst example – stating he would veto it – before even reading it. gee – no one got to read the massive healthcare reform bill before it was passed (in the middle of the night) – you tell me who is playing partisan politics. Its all about protecting their skin in 2012

    July 25, 2011 at 11:16 am | Report abuse |
    • slingshot2

      YOU NAILED IT!
      If Obama and the US Senate ignores the US House upcoming Wednesday bill, they both will have made the "clear choice" to put the US intentional into a financial default and cause "worldwide financial havoc". And for what reason? THEIR PERSONAL GREED. And the US voters aren't STUPID-–and they will "throw out" every single Democrat in 2012 who put their political greed/power over doing the job of serving WE THE PEOPLE first.

      July 25, 2011 at 11:44 am | Report abuse |
  5. rick s.

    The same credit rating agency that sparked fresh panic in the EU has now threatened the U.S. Moody’s says it’s reviewing America’s top triple-A debt rating for a downgrade – citing the political bickering that’s deadlocked budget negotiations in Washington. And even if the budget is approved – it’s unlikely that it’ll offer a solution to America’s debt – that’s according to investor and co-founder of the Quantum Fund, Jim Rogers. Furthermore,Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees. If there are real assets in the trust fund, then Social Security can mail the checks, regardless of what Congress does about the debt limit.
    Social Security status-quo defenders have assured us for the past 25 years that Social Security is fully funded—for the next 25 years, or 2036. So if there are real assets in the Social Security Trust Fund—$2.6 trillion allegedly—then how could failure to reach a debt-ceiling agreement possibly threaten seniors’ Social Security checks?

    July 25, 2011 at 11:18 am | Report abuse |
    • Capitalist First

      Exactly! That's nothing but a scare tactic!

      We can cut Planned Parenthood, congressional budgets, congressional salaries, stop paying expense accounts for congress (surely they can pay for their own cars on a $174K salary!), etc.. BEFORE messing with Social Security!!

      July 25, 2011 at 12:11 pm | Report abuse |
    • RUFFNUTT

      You forgot about the fact that the President could have gotten us of these useless and unnecessary wars two years ago, but didn't! There's where a huge chunk of our tax money goes. needlessly!!!

      July 25, 2011 at 5:39 pm | Report abuse |
  6. s kel

    those republicans in congress right now need to be arrested for treason. As does those who support them, along with all tea party members. I have nothing but pure hate for the tea party,pure hate.

    July 25, 2011 at 11:21 am | Report abuse |
    • Capitalist First

      Why? What exactly are the Republicans doing?

      Setting a budget? Don't Dems believe in budgets?

      July 25, 2011 at 12:08 pm | Report abuse |
    • Scottish Mama

      Bush raised the debt limit every year 6x in a supposedly great economy. The republicans want to hold the american people, the economy, and the President hostage for their own political agenda so they want to deal the debt ceiling every 6 months. So who doesn't believe in budgets? Only when it serves the republicans. Political posturing on the part of republican Congress, oh yeah.

      July 25, 2011 at 12:49 pm | Report abuse |
  7. Tommy's Mom

    The president's plan was voted down you idiot. You're just repeating GOP talking point without verifying anything. Second, if the GOP really cared about the debt why did they raise it and not pass a balanced budget amendment when they were in control just a few years ago. Third, the gang of six had a great idea but toothless inbred rednecks (T-party) opposed it simply because Obama was for it. You see, it's the moronic fools like you that are taking this country down to your level because you can't comprehend the word compromise.

    July 25, 2011 at 11:23 am | Report abuse |
  8. Tommy1414

    OK Tommy's Mom – Name calling belies real idiocracy. But im not surprised. Talking points – gee youve called on the biggest one – When all else fails blame Bush. (Biggest talking point for past two years) You do know that the last two years of his administration were with a DEM Senate and House – right? You do also realize first two terms of our President was with Dem House, Senate and Presidency – and nothing has been done – unemployment up – Debt up and so on. So what shall we do – Continue on same path – yeah that will work. So now you tell me – what was his Plan? – no specifics !- Increase the debt Ceiling and then promise spending cust later? No responsible person would vote for something so unclear – (Oh Im sorry – except Pelosi and the rest of the Libs who said on the healthcare Plan – "lets just vote it through and figure it out later" . Is that responsible leadership. Be realisticc – regardless of what happened in the past – something must change. We dont live our lives spending more than we make – why should we expect that from our government? We cannot compromise on something so inherently wrong.

    July 25, 2011 at 11:33 am | Report abuse |
    • Scottish Mama

      How long did it take the country to come out of a depression? Not 2 years.History also provides that it is the Dems who always are stuck with and pays off the republican wars. So I guess yuu will be voting Democrat in 2012.

      July 25, 2011 at 12:55 pm | Report abuse |
    • Scottish Mama

      Health care act has not kicked in yet 2014, except for helping keep children in college on insurance, if you have a preexiting condition, and fixing the elderly doughnut hole. The Bush / Cheney bills protecting Pharma/insurance deregulation pushed insuance companies into the drivers seat and made their families and friends wealthy. It is your talking pointsthat are easily dspted with history facts.

      July 25, 2011 at 1:00 pm | Report abuse |
  9. Jazzzzzzz

    did't want this, please answear... I cant deal with this at work.

    July 25, 2011 at 11:37 am | Report abuse |
  10. The Cryptojournalist

    Bend over, America.

    http://rhymeandreasonable.com

    Hope everyone's ready for a $2.7 Bn suppository.

    July 25, 2011 at 11:46 am | Report abuse |
  11. Philip

    @Cesar...These leaders do not even know where America stands economically. The Federal Reserve has NEVER been audited. Why have both (D) and (R) leaders always refused to allow this audit? Because even a simple audit would show how the Pentagon has been waging war, not with the trillion dollars a year we give them for this purpose, but from OUR Social security funds. Our SS account has been drained faster than we can fill it...for decades. An audit would prove that the war-mongers have had their grubbly paws in our cookie jar since we first filled it up.

    July 25, 2011 at 12:16 pm | Report abuse |
  12. jimmy

    you tell em philip. and watch the movie INSIDE JOB. they are all criminals. t

    July 25, 2011 at 12:22 pm | Report abuse |
  13. jimmy

    sorry. my spelling isnt so good. i meant crinimals.

    July 25, 2011 at 12:41 pm | Report abuse |
  14. RUFFNUTT

    new plan.. fire up the money printers in the mint...

    July 25, 2011 at 12:42 pm | Report abuse |
    • RUFFNUTT

      ...and stop all these obnoxious wars where we have no business being!!!

      July 25, 2011 at 5:42 pm | Report abuse |
  15. Philip

    @RUFFNUTT...Uncle Sam doesn't print our money. The local branch of The Bank for International Settlements (they have branch-banks in most all of the worlds powerful countries) is the Federal Reserve. They print the money when they decide...not when an "Obama" decides. Governments do not control the worlds economies. One single foreign bank does. Where is this bank? Basel, Switzerland. Locals call thei butt-ugly office tower "The Tower of Basel". Most do not even know it exists. The Bush's knew, but would not speak of it. Obama knows...but mumms the word. We've been had...bigtime.

    July 25, 2011 at 12:52 pm | Report abuse |
    • Scottish Mama

      We outsourced money printing, that takes the cake.

      July 25, 2011 at 1:03 pm | Report abuse |
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