The federal government has four days left to raise the nation's current $14.3 trillion debt ceiling, the Treasury Department said. A 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.
Senate Democrats on Friday blocked the latest House Republican proposal to cut spending and increase the federal debt ceiling, setting up a weekend of negotiations to seek a deal that would avoid a potential federal default next week.
Earlier Friday, House Republicans passed Speaker John Boehner's latest proposal, overcoming opposition from Democrats and tea party conservatives. But Democrats had vowed to defeat it in the Senate, where they have the majority.
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 has since 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, according to two GOP congressmen.
The vote was scheduled to have taken place on Thursday night, but Republican leaders postponed the vote amid signs they did not have enough support to pass it.
Senate Majority Leader Harry Reid's plan would reduce federal deficits over the next decade by at least $2.2 trillion while raising the debt ceiling by $2.7 trillion. Reid has promised additional cuts will be included in the final version of his legislation - enough to meet the GOP's demand that total savings should at least equal any total debt ceiling hike.
Reid's plan would cut spending by $1.8 trillion. 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.
Reid said Friday morning that he "must take action" on the Senate's legislation by the end of the day.
Obama has endorsed Reid's plan and threatened a veto of Boehner's plan. The president strongly opposes any bill which doesn't raise the debt ceiling through the 2012 election. Obama 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.
When will the Presidenr lead? Where is his plan?
This stuff about where's the plan whether it be a republic, democratic or presidential plan ignores one key fact; we let the fox look after the chickens. This process has been ongoing. As individuals we've been over-extending ourselves thinking the some up above would make it alright. He/She doesn't work that way. We've had the good sense to put our houses in order and, as a whole, we haven't. It's rediculous to put all the blame on individuals who inherited a sinking ship to save it without everyone grabbing a bucket.
google Obama's site.. Obama.com all the answers are there!!!!!!
i hate republican morons that parrot " wheres the presidents plan" The presidents plan is Harry Reid plan or do you think the democrats introducing two identical plans makes sense?
Where is the Presidents plan? What is House Democrats plan? Where is their budget?
they have no plan. they have used the same plan and removed the things they do not like.
The plan is on Obama's web site look it up it is open for everyone to see always have been!!!
stupid republican parrot, the presidents plan is the the Reid plan.
what would the point of the house minority bringing up a bill with now chance of passing,it wouldn't make it out of committee for a vote. please stop repeating what ever republican pundit you listen to and maybe educate yourself on how congress works
I agree with Cloyce. Obama has power to get his representative (house minority leader) to introduce a bill outlining his debt reduction plan. The silence from Obama and Pelosi is startling – only the threat of Senate rejection and Obama veto. Why? Obama wants to kick the can down the road. And the House Republicans are calling him on it. Given the spending proclivities of Democrats (who else would couch tax increases via removal of long-standing deductions as deficit control measures). As I have said in other posts, everything should be on the table for spending cuts, no sacred cows. And when government can really prove that it can cut spending, then and only then can the taxes be looked at. As it is, there is no real spending cuts because none of the projections honestly take into account the spending increases due to Obama care. So, given that Congress, particularly the Democrats, are not serious about spending cuts, I say let the default happen.
How is this saving money? We have too many of your special groups as it is. "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 Do you really care about how fed up the American people are of all the game playing going on? Suck it up and Clean it up!
Right and Boeehner and the other Republicans want to say the idea to save the US is theirs at the same time regurgitate the same idea of the president sad sad sad...Reid
Stop messing with SS, Medicare rich should pay their fare share NOW!!!!
me, well said.
Unfortunately, I have low confidence in my fellow Americans to do the right thing...the dumbing down continues as we self select "news" that reinforces our ignorance and rules out alternative policy options. We are more concerned with "American Idol" than we are with our fiscal health and the wars we wage.
If we don't wake up soon, it will be too late and many of us will be wondering why this great democracy has failed us. The fact we would even consider a self-imposed default is mind-bending to nations that have gone through this.
Wake up America. The annual budget deficits have created a debt approaching 100% of our annual GDP–this is not a good place to be. You can thank our former President for nearly doubling the debt ($5T+) during his tenure and our current president for the past $4T+. We only have three options: cut spending, increase revenues or a combination of the two. My recommendation is for the combination pending a comprehensive analysis and national debate on what we want from our government. Whatever that turns out to be, we should be prepared to pay for it, rather than borrow it from other nations. Talk about a threat to national security....
Keep in mind if we cut spending too much right away, the current unemployment rate will look good relative to where we'll be. Eliminating some of the corporate welfare makes sense. Why are we subsidizing ethanol? Do you realize that this artificially inflates the cost of our groceries? There are plenty of other similarly stupid budgetary items that we could and should identify and eliminate; however, relative to health care costs, they are insignificant....
We need to figure out a cost effective way to provide health care...which is why Medicare and Medicaid costs are so excessive. Our health care is more costly and less effective than many other industrialized nations. The reasons for this are myriad, but it boils down to lack of incentive to reduce and contain costs. This will eventually bankrupt this nation. Not providing health care to the needy won't solve the problem either. Take a look at the profit margins for pharmaceuticals as a starting point. While I'm an avid Capitalist, I can't get my mind around those numbers.... Think about it. Why should patients be "asking their doctor" to prescribe a particular drug? Any competent doctor should summarily dismiss such a request. Those ads should be illegal in my view....
Finally, we need to simplify the tax code, eliminate most of the deductions, and enforce it consistently. We should pay as we go for our government service, with the exception of those things that have a useful life of decades (large capital improvements like bridges, tunnels, and railways–things we should have addressed with the stimulus, as they are in extremely bad shape).
Until and unless we as a nation get smarter about the role of government and our budget, corporations will continue to define the legislative and regulatory environment via unlimited campaign contributions. Our politicians will continue to represent them, rather than us, and use their office for personal gain, rather than to represent us citizens. The outcome is still TBD, but not looking particularly good. I suggest folks start to read things that conflict with their currently held views and adopt new critical thinking skills. Failure to do so will result in our eventual demise.
Well said, but will someone reply to the possibility of establishing deficit bonds so us little guys can make a loud noise?
Yes, a cynical but I believe a realistic point of view given our current state.
Has anyone been watching the market today. I know it looks like a bad trend but if you're worth 250K a year this could be a sign of more good bargains to come. Just think of how many forclosed homes you can buy cheap and sale high. Hey, and you won't have to worry about the tax ramifications.
A chart in the New York times shows that $6.1 trillion of our $14.3 trillion deficit occurred during George W. Bush's administration. Add George H.W. Bush's deficit of $1.5 trillion to the pile and that's more than half of what our nation owes. The lowest deficit contribution since Ronald Regan was elected? Bill Clinton, at $1.4 trillion. And the Republicans call themselves fiscal conservatives? Give me a break! Add to this series of truths the fact that tax revenues are now the lowest percentage of GDP since 1950; our real problem is the absence of revenue, not expenses.
Republican administrations have drained the wealth and incomes of middle class America. They care nothing about us. It's all about the top 1% and getting their political contributions. Then our Republican representatives want to stand in front of cameras and call the 1% club our job creators. Maybe for Indonesia, Mexico and other third world counties. Not for Americans.
Come on America. Let 's vote these bums out!
Dave I found this to show the amounts of the last 4 presidents:
The debt ceiling was raised on four occasions during President George H.W. Bush's one term, from $2.8 trillion when he took office in 1989 to $4.145 trillion when he left the White House in 1993 – an increase of $1.345 trillion or 48 percent.
Under Bush the debt ceiling increased:
by $70 billion to $2.87 trillion in August 1989;
by $252.7 billion to $3.1227 trillion three months later, in November 1989;
by $107.3 billion to $3.23 trillion 11 months later, in October 1990;
and by $915 billion to $4.145 trillion one month later, in November 1990.
Under Clinton the debt ceiling increased: from $4.145 trillion when he took office in 1993 to $5.95 trillion when he left the White House in 2001 – an increase of $1.805 trillion or 44 percent.
by $225 billion to $4.37 trillion in April 1993;
by $530 billion to $4.9 trillion four months later, in August 1993;
by $600 billion to $5.5 trillion two years and seven months later, in March 1996;
and by $450 billion to $5.95 trillion 17 months later, in August 1997.
Under Bush the debt ceiling increased: The debt ceiling was raised on seven occasions during President George W. Bush's two terms in office, from $5.95 trillion in 2001 to nearly double that, $11.315 trillion, in 2009 – an increase of $5.365 trillion or 90 percent.
by $450 billion to $6.4 trillion in June 2002;
by $984 billion to $7.384 trillion 11 months later, in May 2003;
by $800 billion to $8.184 trillion 18 months later, in November 2004;
by $781 billion to $8.965 trillion 16 months later, in March 2006;
by $850 billion to $9.815 trillion 18 months later, in September 2007;
by $800 billion to $10.615 trillion 10 months later, in July 2008;
and by $700 billion to $11.315 trillion three months later, in October 2008.
Under Obama the debt ceiling increased:
by $789 billion to $12.104 trillion in February 2009, Obama's first year in office, under the American Recovery and Reinvestment Act;
by $290 billion to $12.394 trillion ten months later, in December 2009;
and by $1.9 trillion to $14.294 trillion two months later, in February 2010.
How many of those debt increases were prompted by runaway spending during times the Congress was controlled by Democrats?
Party politics are part of the reason we are in this mess. The point is unless you are in the same income bracket, nothing else matters. Divide and Conquer among party lines, religion race and what ever else BS they want to feed us. That way they get to "Keep Stealing from US and giving us the bill.
Keep your eye on the money. That's how DC really operates. Term Limits and Accountability are dirty words. The rich get richer and we go to work. The Grand Hustle is on and always has been.
Obama has been the most open Presidient we ever had in history but haters will be haters!!!!
Gaston, You're perfectly correct except for one thing. He's been too nice. In essence, many of us voted for him but abandoned him at the first sign of trouble. He's no saint, mind you; but he didn't profess to be either...that was for others to do (as I'm sure they will now). For his platform of change to succeed it was up to the citizens to define the change they believed in; become citizens, study the issues, take responsibility for your actions. His main fault, and we all have them, is that he's a referee not a dictator.
I agree and some people can handle freedom of choice and the teamwork and communication needed for change
I agree with dave48!!!! the republicans and tea partyers only care about themselves and screw the middle class,the disabled,seniors and the poor.I am disabled and recieve ssi.that is my only means of income and if they can't come up with a comprise and I don't get my check I won't have any where to go.these conservatives or should I say extreme radicals want to stuff there pockets and continually screw us.They need to get it together and work with the president instead of a continual no on everything.I compleyely agree with the president on having the wealthy step up to the plate and start contributing since they are in the lowest tax bracket possible which is almost next to nothing.They won't really lose their money because they know they can make that portion up within a matter of maybe a week or two.The burden should not always be put on the backs of the middle class,seniors,disabled and the poor
Tyical. You pay no taxes and are sucking off of the system, so of course you want to continue feeding at the trough. Tell me, have you ever worked? did you have disability insurance? I do. So, I pay taxes, and I plan for my future, and I buy insurance to protect myself if something should go wrong. You never planned for the rainy day, but now want me to bail you out, and scream like crazy when I want to put some limits on it. Tough. Get a job. See, Americans with Disabilities Act. So your disability is no longer a crutch. By the way, I suspect you are a paid politicial shill for the Democratic Party, or should I says the Socialists of America party.
I am learning Chinese and have my resume out to many factories in Beijing... This way I will be ahead of all of you in 2012 when America merges.
Only one problem M, they're just as anti-labor as we've become.
Where is the leadership? Why does the President not have his plan on the table? Is he afraid that the next time he runs he might just have to stand up to something? (it would be hard to blame his own plan on Bush) Does no one care about the little guy? The way the government has handled social security, makes Madoff look like an alter boy. Will some one stand up be a man and do the right thing? THE DEFINITION OF INSANITY, "KEEP DOING THE SAME THING YOU BEEN DOING AND EXPECT TO GET A DIFFERENT RESULT." Wake up Washington we are trying to live out here. We don't need any more special interest laws or court judges to interpret them, We have 10 LAWS, the "10 COMMANDMENT " , try putting them back on the wall and live by them. You will find you don't shoot yourself in the foot as often and your mouth does not hurt near as mush, getting ones foot out is very painful.
sounds a lot like sharia law is what you want? if so please move your but to the middle east
Buying back American debt should be a top priority after fixing this mess. Our nations Sovereignty should not be for sale
Sovereignty is the quality of having supreme, independent authority over a geographic area.
E, that's what the deficit bond would do.
I have as much to lose as anybody. But I think it is assine to suggest that the Tea Party doesn't earnestly think they are doing what is good for the country. And with Congress's record of breaking every promise and every mechanism to control spending, I now agree that best course is for the country to go into default. That is the only way to get across the message to Democrats that spending is out of control and must be stopped. Once spending is seriously controlled, then I would certainly consider increased taxes. But the way it looks right now, the only solution offered by the Democrats to the spending problem is to raise taxes. I am tired of being robbed by my own government and seeing my hard earned money go down (many) ratholes. And yes, I include the military, aid to Israel, everything should be on the table for cutting – even Medicare, Medicaid, welfare, Social Security, etc. No sacred cows. None, not education, not anything. Each party is to blame for the current situation, but only the House Republicans seem serious about controlling it, as opposed to Democrats kicking the can down the road. By the way, why no mention in Democrats' plan about the massive spending increase in 2014 called Obamacare? Why? Because they are not serious about controlling spending. So, though I stand to lose big time, for the sake of my kids and future generations, 'shut er down"!
Make war on the deficit...Buy deficit bonds.
No thanks on the deficit bonds. I know "toxic assets" when I see them. Maybe, like California, the government will back debts with IOU's. Lovely.
Dave, The bums come from both sides of the aisle. They fester there due to American apathy and ignorance. Until we solve that problem they will remain.
Sheldon the DOW was off by just under $100...it was a great day to buy. I'm betting they will raise the ceiling and kick much of the can down the road...hopefully we can get our act together soon, though, as the credit rating reduction is probably imminent since we don't seem to have the ability to address the long run.