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Debt debate: Where things stand
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
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
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.
President Obama
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.
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I make 9.50 an hour. My family barely gets by. I will pay more in taxes, just please get this done so my Mom doesn't lose her Social Security check. Please.
My sentiments exactly but I only make $8 an hour on a part time job. Things really suck in AZ.
Honestly? Leave it to a liberal to use fear-mongering.....
I hold the Tea Party responsible because we wouldn't be in this mess if they hadn't put that idiot Sharon Angle up to face Harry Reid instead of a viable Republican candidate. They lost the Senate for Republicans. Talk about fear mongering, she used it to the max and lost the election
What the goverment should do is eliminate all of the contractors becouse there the ones who are taking the money, for example i work as a security guard for a federal facility and i get paid less than 12.00 an hour and the contracter gets 43.00 there is where tbe money goes
why would you thing your moms ss check is in danger? because they threatened it? why dont you know a fear tactic when you hear one? they wont touch any ss check to anyone. its an idol threat and a lie. but, they sure scared you with it, didnt they?
After watching Nancy Pelosi slip south of sanity with her comment that [Darth?] Boehner has "gone over to the dark side" (pathetic, but hilarious to watch), this whole Congress should be nicknamed "A New Hopeless". Time to give into the Dark Side of the Debt. It is our Destiny–and our children's too it seems. Fit me for my black cape.
@Paul(lol)...I hear you. Congress has been "trying" for a lot longer than "three years" too.
Debt Wars!
Episode 822
The New Hopeless
It is a dark time for the Americans. Rebel Repbulicans, striking from their hidden tea bags in the House, have stymied the efforts of the Democratic Empire to balance the budget...
During the Battle, Obi-Wan Pelosi accuses Darth Boehner of giving in to the Dark Side of the Debt while Emperor Obama declares the Tea Party of the Sith has plans to build a DEBT STAR, a default of unbelievable power, capable of destroying an entire Social Security check!
Pursued by the Empire's sinister agents of Fox News, CNN, and MSNBC, a small band of bi-partisans struggle against impossible special interests to bring order and a balanced budget to the Americans...
Taxed Enough Already
I say we start getting rid of the waste in the White House! Why do these Men and Woman of the United States get to have Sunday off when the JOB is not done, Heck I would lose my job. We need to look at all the waste and get rid of it. We as voters need to look at this! I have one check book and mine is balanced every month as I'm sure alot of Americans do the same. We are asked to pay our bills all the time, So why is the White House even thinking of not paying there bills? I say do a 20% across the board tax bill for everyone, I say what we pay for to in port or export they meaning over seas pay the same! And why when we have a program out there we have to have another program out there to make sure the one we had first gets done? I say we bring home some of our Fine Americans over seas and start taking care of our own boarders! It's time to take care of waste and start saving. It does not take a Rocket Science to do this. I'll ever take my own time to help out with the BUDGET!!
Tax the bottom 48% for a change.
Here's thought: Everybody is onboard to blame the president for all of this. When Clinton left office, we had a SURPLUS. We were paying just over $1- $1.50 for a gallon of gas. The economy was strong. Exit the Clinton, enter the Bush. In 8 years, we had a deficit, tax cuts for the rich, fighting on 2 fronts, over $4 for a gallon gas, and the country in one of the biggest recessions in it's history.
But yet everyone is ready to blast the current administration who walked into the middle of this mess. Further more, since the rebuplicans can no longer bat first, they want to take their ball and go home. They were voted in during the mid-term elections. Since then, the country has truly suffered. We almost didn't get a balanced budget, and now this. Do they know how to compromise?
The biggest problem that Bush was saddled with was a balanced budget left to him by Clinton, but he acted quickly to take care of that! An extremely expensive – and unbudgeted – war in Iraq and then tax give-aways to his rich pals.
You don't have to look much further than that.
Hallelujah!!!!
NAFTA
I think YOU ALL have missed the facts.
Your Government spends more money on War than ALL other Countries Combined in the World. It's a FACT you can look up.
The Pentagon gets $700 BILLION a year for WAR.
Do any of you understand what that Money would do to your Country if it was spent at home??
This Money for War is not being discussed at all in the Debit debate, they refuse to cut any of it or even discuss it.
What they are doing is a disgise, a bandade on a sever wound. They are going to fix nothing until we are in the worse DEPRESSION in American History.
Ron Paul is the only Candidate screaming about this and bring our Troops Home and stop the spending and spend it on our Country.
FACT: In the last Election and now in this one, more active Military Troops Donated to Ron Paul's Campaign than ALL other Candidates combined including the Commander and Chief.
The Troops have spoken in the last election and now this one.
Why are you Americans NOT SUPPORTING our Troops.
Ron Paul 2012
Why does the president get all the accolades and all the blame? We have a congress with about 500 members in it. Reagan, Bush, Clinton and Obama never did anything they weren't allowed to. We get it there was a surplus in the 90s but we need to see that NATA was the beginning of a downward spiral for our economy. Bring the jobs back and our economy will bounce back with it. Quit living in the past "good ol days" of Clinton surplus.. We are here and now..
OK – after we raise the debt ceiling by $2.5 trillion to get us through 2012 (1 Oct 11 – 30 Sept 12) then what?
Also, how can they threaten Social Security when that is a separate fund we pay into? Unless they have already had their hands in it and spent it too?
Honrstly – Has anyone – especially those inside the beltway – read or even skimmed The National Commission on Fiscal Responsibility? Stop pointing an endless barrage of blame fingers and thumb through this! THEY and I mean all of THEM past and present have culpability – with a few changes this plan could actually work! If you don't believe me then go online to the Economist Mag – damn those people are smart!