Debt debate: Where things stand
Speaker John Boehner gives the thumbs-up Friday after the House voted 218-210 to approve his debt-ceiling measure.
July 30th, 2011
10:28 PM ET

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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Filed under: Barack Obama • Harry Reid • John Boehner • Politics
soundoff (370 Responses)
  1. mrsc06

    Congress is still up to their tricks. Don't they get extra money for serving on committees? Unless they are doing the committee thing as their job, as they should be, I think everyone is still not,(congress) getting it! The people will vote you out. These politicians thought the tea party was a scare, wait and see what's next.You "career" politicians, democrat or Republican are at fault for this and the freshman have to rise above and speak for the people!! Both bills are still a slap in the face to the "average" American. its time for Reid and all those 20-30 plus years politicians to get out. They have done nothing but harm to this country!!! and these bills and actions show their greed and egos are still in control!!

    July 30, 2011 at 1:17 pm | Report abuse |
  2. away with tea party

    Away with the tea party.

    July 30, 2011 at 1:28 pm | Report abuse |
  3. Walter Smitty

    Away with liberalism...it is a mental disorder.

    July 30, 2011 at 1:32 pm | Report abuse |
    • steveinmn

      Away with Walter Smitty...he has a mental disorder.

      Listen, Walty, you and your mindless sniping are part of (most of) the problem. Go away until you figure out how to be useful.

      July 30, 2011 at 1:59 pm | Report abuse |
    • slider

      Now Walter what have you got against living in a bankrupt and socolist America. Seems to be one of the liberals dreams and they are working hard toward it.

      July 31, 2011 at 12:55 am | Report abuse |
  4. Osell

    Congress and the President need to close the spending loopholes, paying other countries money, etc..

    July 30, 2011 at 1:32 pm | Report abuse |
  5. richard williams

    The tea party Hobbits' lust for power will destroy our nation! John Boehner is their puppet. Republican extremists invited Satan into their house and now they hold the republican party hostage to their evil greed for fame and power. Effectively the Hobbits hold the United States of America hostage. They will kill the hostage which is our Nation and the domino effect just may lay the entire World to waste and ruin. Get ready for THE END OF TIME AS WE KNOW IT.

    July 30, 2011 at 1:37 pm | Report abuse |
  6. Desert Penguin

    Too easy mortgages, derivatives, TARP, .....show who controls our government.. Think there aren't billions or even more to be made by indirectly controlling the fall and rise of the markets (world-wide) and the price of gold, silver, platinum, etc. (guess what Wall Street firm(s) are the biggest precious metals holders/traders) Think about China and all the US Treauries it owns .... think there aren't opportunities to make huge profits in it's market as well as others worldwide as it crashes and then comes back after the debt limit is finally raised?. If one has a global financial perspective and doesn't care that the USA may fall to the second tier internationally, then yea for the embarassing events in Washington and maybe throw in a little encouragement ($$$) to their minions to make sure they continue the fools' task. The action of the markets are already showing how this will play out.

    July 30, 2011 at 1:38 pm | Report abuse |
  7. Philip

    Away with both party's calling a jobs crisis a debt crisis. We need to create 150,000 jobs per month just to break even. Debt equals jobs going overseas. Raisning the debt ceiling raises the number of jons that will be going overseas on top of that. Let our government go bankrupt again. They can file for international bk protection just like many of US fo had to do personally.

    July 30, 2011 at 1:43 pm | Report abuse |
  8. skel

    Away with the morons who puts their pocketbook over the people they are supposed to represent. Away with the idiots who think that these people have your best interests at heart.
    Away with the bozos who are selling this country to the highest bidder overseas. Away with the career politicos who haven't got any clue what we, the people, want!

    July 30, 2011 at 1:46 pm | Report abuse |
  9. Walter Smitty

    This problem was brewing long before the Tea Party. The Tea Party came about to keep Obama and the liberal freaks from further destroying this country.

    July 30, 2011 at 1:47 pm | Report abuse |
    • engineer1

      Wow. You're forgetting who took us from surplus to big deficits after 2001, raising debt as percent of GDP from 60% up to 80% when he left office.

      July 30, 2011 at 9:39 pm | Report abuse |
  10. skel

    Call it what you want, it's a crisis anyway you slice it, dice it, or throw it in a salad. The one who have caused our jobs going overseas are the ones who are trying to kill any hope people have for the future of our country.

    July 30, 2011 at 1:50 pm | Report abuse |
  11. skel

    Typo: the *ones*.

    July 30, 2011 at 1:51 pm | Report abuse |
  12. Jude

    republicans went to bed with the devil from Teabaggisstan. The are burden with the yoike and will bring our country to third world standards as they push to take america "backwards." Sad to see the bagrobots acting in behalf of a very small blind klan of folks being funded by very big $$$ and ignorantly ignoring the plight of the average american. Sad times for america but we've seen worse in our american past as we progress toward a more civilized society.

    July 30, 2011 at 1:56 pm | Report abuse |
  13. Madame Royale

    @steveinmn:
    I call those the one line wonders.
    They repeat the same thing over and over, offering no insight and showing how dumb they really are.
    Just snipe, reload, and repeat.

    July 30, 2011 at 2:03 pm | Report abuse |
  14. jain pawan

    the world is watching us law makers. delay breaksrecovery. cinfidence and will decelarate speed breakers not welcome

    July 30, 2011 at 2:03 pm | Report abuse |
  15. skel

    Kind of reminds me of school-yard bullies whose comeback is always, "you're gay".

    July 30, 2011 at 2:04 pm | Report abuse |
    • Allan

      Well, are you?

      July 31, 2011 at 11:43 am | Report abuse |
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