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 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 Speaker John BoehnerÂ 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.
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.
Self serving politicians, foreign lobbies, special interests controlling our destiny -a sure shot recipe for disaster – and that has come to pass. Iraq, Afghanistan lust for even more of the same.
What did we expect?
If we default, we the American public would suffer of course & the ripple effect on world economies & financial markets would be ugly.Coming around to bite us you know where.
The Right Wing thugs up on the Hill & those who hold the interest of our so called 'allies' to heart over that of America & Americans have brought us to the brink.
Would we ever sit up , take notice & do something about it ? Boot out these thugs come next elections.
Does the government know about freecreditreport dot com? They're on tv all the time..
maybe the house & senate can start with themselves by not getting paid until they can settle this mess. how about a pay cut .none of them deserve 175k a year. how about doing away with their cars,expense accounts & all the other perks. If they really cared we can save billilons because they all have a blan k check. too much power. they don't care .
Congress and the Senate are a disgrace to civilized people. It's a collection of chattering monkeys, with all of them wanting the single banana. I've seen 2nd graders solve problems better than the entire bunch in there now. Since we have a 'budget crisis,' there should be an immediate permanent reduction in staff, and ALL perks of all Senate and Congress. It's also way past time to past legislation like we have in California. No budget=no pay here. It works! Never seen so many senators scrambling to get a budget done since they lost their pay!
I also have a gripe with CNN and your 'sponsers.' The average americam watching CNN doesn't have any savings to invest, since much of the country HAS to live paycheck to paycheck (if you even have a job), and yet it's commercial after commercial with 'buy gold & silver, invest in this and that stock, etc. ALL these commercials are for the rich. You know, republican rich. Not the rest of us. It's insulting to watch how bad off we are, like myself and many, many others, and all you guys present is 'bolster your wealth.' You really need to think about it.
The networks are showing they are bought and paid for as well. All of the commercials are about drugs, insurance, banking and gold.
Why don't you have some commercials about where we can get cheaper food, clothing or energy?
Does anyone else here feel like the lead is about to be poured onto you from the castle wall?
I am starting to understand why one of the leading companies right now, is a survival preparedness, meals ready to eat store!
I liked the old band better...what about you?
Little known fact:
I played the white-haired old lady with the glasses in those commercials.
Make-up does wonders....
Ok, I didn't, but I *could have*....
Well, no I couldn't have, I'm much younger than her.....
While I agree in theory, CNN is a business, and like any other business, gets paid to air the commercial.
Perhaps the wrong sponsors are coming to CNN, but most big businesses aren't altruistic anyway...who turns aways paying customers?
I am sick and tired of your politics but not surprised!! You refuse even to say the word..compromise... you need to get some backbone and tell the tea party people to start thinking about the common good versus philosophy!!!
Send Boehner back to Ohio where he belongs to clean comodes again.I worked in restuarnts until my feet bled but I am not crying about it.My Husband is disabled and so am I but you all dont seem to care who can pay the electric bill or not
Boehner does not belong in Washington.He want the poor to starve to death or die from the heat.You all get busy and settle this debt.I would not be able to show my face on TV if I knew the poor and disabled was going to go hungry witout SSecurity.
We are in a "Economic Ideology Civil War"!
Well well, the first day of reckoning is at hand. Did anyone really believe that anything would get done with the Tea Party having hijacked the Republican party? But, let's face it, both parties are bought and paid for by corporations and if you don't get that, you truly have your head buried in the sand.
But at least Fox news has another nut that replaced Beck, Hannity! What a total nut, does anyone actually listen to this nut for more than fifteen seconds? What a total racist!
The I scanned the Tea Partier's protesting and guess what....NO people of color! Shocked? Where have you been if this truly surprises you? The Tea Party is juts a bunch of people to chicken to show their true colors whit consist of white pointed masks and white sheets!
Now they are acting like their was a vote for a new dictator and they won!
What is truly sad about it is, they are a reflection of all those who put them into office! That is truly scary isn't it.
But let's admit one thing, we are certainly seeing what our "leaders" are truly all about, themselves and to hell with the people, they have their castle.
And guess what, they were elected so you did it to yourselves America! Too bad you can't have a recall like Wisconsin at the federal level because these people who want the economy to fail,just because they cannot stand a black man as president. So they will drive all of us over the cliff all because they are not getting their way.
Now you know what the ALL NEW republican party is all about!
It is truly sad that our nation is where it is at currently. Greed is on of the answers here. Most people I know can make a budget. The 7th graders I teach know that you can not spend money you do not have. Just get the deal done! The game of politics needs to stop.
I agree.....with shelby!
Hear! Hear! (I agree)
Seems to me that Senator Reid's plan is the only one that makes sense given the political climate. It has real reductions in debt while not raising taxes or reforming Medicare and Social Security and keeps us functioning past the next election. In the interim, the bipartisan committee can work on real reform without the pressure of time and politics. Makes lots of sense to me.
I heard that when this country was established that working in the government was meant to be a honor to serve and that at the end of the term the people would go back to their own lives...if this is true, why are they still being paid an obscene amount of money once leaving their governmental position? I agree the past presidents should be compensated a bit, but not everyone in the government. It's us, the working stiffs, that are paying their bills while we struggle to make our own ways. Wouldn't it be nice to go back to the way it was meant to be? I wonder what would they think or do if they had to go back to 'normalcy' and deal with the issues that face most of us daily.