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.
Both the Democratic and Republican Parties and our representatives have failed us and AMERICA! We are fast becoming a second.rate nation. It is long overdue for the Middle Class to leave both parties and elevate the status of one of our Minor Parties to help us out of this mess. There are many including Libertarian, Reform, Green, etc. to choose from. The Tea Party is NOT a real party choice.
The very words you speak ARE the tea party: "Both the Democratic and Republican Parties and our representatives have failed us and AMERICA! We are fast becoming a second.rate nation. It is long overdue for the Middle Class to leave both parties and elevate the status of one of our Minor Parties to help us out of this mess. "
This is the REASON
This is the very REASON why the Tea Party was created. Whether you want to believe it or not, YOU are a member of the tea party.
Why don't you all stop complaining and being so envious and work hard so you too can be wealthy? Are you proud of the fact that you can't take care of yourself and depend on others to do so? Where is the accountability in your lives? You all are pathetic and make me sick.
You are so empathetic towards others. I hope you never need a safety net, since you are so wealthy.
You make no sense. If everyone were wealthy, we'd all be poor. Figure it out. Money is not the key to happiness. People simply want the govenment to raise the debt ceiling and make it longer term so we don't have to put up with this for a while.
Thanks JB, well said.
you make me sick ick...some people are disabled and can't work even though they would like to...you are what is wrong with this nation ...your thinking is askewed ...you have no morals about you if you think everyone is envious of the wealthy ...some ppl are perfectly happy with what they have .you don't stop and think of the unfortunate souls who do have to depend on the gov't to keep them afloat in this economy ...not because they want to but because they have to and let me tell u one thing ppl are taking fine care of themselves!!! You are a moron!!!
Excuse me? I work very hard! I put myself through school, used few loans, paid off those loans, and I am still not wealthy! How dare you say such an ugly thing to people. You don't know what their life is. I teach and I am one who is being pushed further and further down the ladder of the middle class. . .why? I work, I work hard, I work 7 days a week to teach!
Way to go Don Lemon! Finally someone is standing up to these politicians. Unfortunately I don't think Rand Paul got the message. Keep it up. We all feel your same frustration.
Most of us now understand the financial and rhetoric waste of our financial govt. It should not take half a brain to see that a Balanced budget is the bare minimum along with a plan to pay back the debt. It is almost like our president taught everyone else to vote 'present' like he did when he was a senator!
Maybe all along President Obama had it together. Vote present and improve your golf handicap as long as you have unlimited minutes on your blackberry phone to vote while sipping a few beers at the clubhouse. The tea-party as people like to call them are merely fiscal conservatives that now number almost as many democrats as republicans. Let's start by getting out of Lybia and the $ trillion that it has cost us funding NATO that is not even on the graphic sent out by the White House last week.
So let me get this straight...Obama thinks that taxing the rich will help the economy? Perhaps you need a history lesson sir. That will do nothing but INCREASE unemployment. And unemployment is the root of the problem because 15% of America is no longer paying taxes due to being out of a job. But hey, let's go ahead and punish the people who create jobs, so that we can increase unemployment and continue to spend recklessly with other people's money. Too many retard sandwiches Obama.
Same old story, but where are the jobs the wealthy are supposed to be creating?
The wealthy don't create jobs. ie. you manufacture golf clubs and no one is buying them, you don't hire more people to make more golf clubs. The wealthy will move more money off shore if you give them more, that is fact.
When Clinton was president, he raised taxes and about 20 million jobs were created in his 8 years. Bush came along, cut taxes, and his administration was able to create only about 5 million jobs in 8 years.....and many of those were being lost when he left office.
I am not talking about the irresponsible rich people, if you want to go there. I am not talking about Solja Boy, who just bought a 50 million dollar plane. I am talking about people like Bill Gates. Who started Microsoft who now employs 90,000 people. You want to crush the entrepreneurial spirit? Go ahead and increase taxes so you can stunt the growth of new business. The ONLY reason we pay taxes is to make our government bigger. The real greedy people are those in Washington. This is not socialism. If you want to rob Peter to pay Paul, you should live in another country that is not built on Capitalism.
Bill gates didn't put in his own money. Contray to what you might think, they left the earnings in Microsoft to help it grow, taxes played no part in it. No way would they cliam the profits individually and pay taxes on it, and then put it back in the company. That would make zero sense. If tax rates were at 99%, they still would have left the money there. In fact more personal taxes will cause busines owners to keep money in the company and invest, creating new jobs. That's reality.
Let's step back and think about this.....wasn't the reason that Al Queda attacked the world trade center an attempt to ruin or destroy our economy, and financial markets?...Well now we're experiencing economic terrorism by our own congress...specifically the Tea Party radicals in the Republican party. Al Queda and the Taliban are no longer our primary threat. If the idiots in Washington can't get it together, they will replace both those groups as our main threat.
You have a point, Jeff. In fact Bush's war caused financial destruction to our economy (lives too). The cost of the wars was our defeat. Bin Lad,, said our economy was fragile and, in a sense, he won. 4 trillion dollars lost because of Bin Lad.. Let's raise taxes on the wealthy, raise the debt ceiling for the long term and learn from it. Let's become a stronger country.
Wow, I wish thay would come up with something soon, my two year old son is on ssi. How will we buy things he needs and how will he get p.t. help and such.
Get your ass out and do some work that's how you pay for stuff.
Wow! You Suck.....good name. Do all your friends call you that?
The anchor on duty at 5:15 is such a simpleton. He doesn't know what default is and the network goes on the street and interviews people who do not understand what default is. The ONLY way a default occurs is if the president instructs the treasury secretary not to pay the bills with the cash on-hand. You, CNN, are misleading your viewers.
Hey Dave, you DO know that the debt ceiling was reached some time ago and that the Aug 2nd deadline is the date when the US runs out of money, right? And if we can't pay ALL our bills we will be defaulting on those that don't get paid.
Democrats are idiots, end of story...
Face it.. Policy by policy;
GW cost us 5.5 trillion dollars with 4 trillion for the wars and 1.5 trillion for his stimulus (800 billion for tax cuts and 700 biillion on tax stimulus).
Obama's policies cost us 1.4 trillion, far less than Bushes.
The Senate Minority Leader will not talk to the Majority leader and instead will speak only to the President and V.P. It is like the head of R&D will not speak to the head of manufacturing, but will only speak to the President or CEO! It is outrageus.
Another example: The younger son in the house will not speak to the elder son, but will only make a deal with Dad and Mom. Can you imagine that?
In either case, the company or the family will be called disfunctional. Why do these people who run our country behave like spoilled brats?
Can you imagine the national wealth spent in the all the wrangling, all the time and money spent in running both houses for mindless, idiosyncratic debates, and all the TV time and all the ink space in the press an so on? All these are the wealth of the people being squandered. If these resources can be put to use on debates on new energy policy, new infrasturcture building, whatever that will put people back to work – can you imagine, how far along we will be as a nation?
It is truly outrageous.
We need a work class leadership at all levels including those who govern us. Instead what we have a bunch of rich spoiled brats, who always complain about Washington being broken, yet love to be there and continue the breaking.
If every member of congress would take a 10% pay cut for 1 month, think of how much money we could save. Put all that money twards our debt. Instead of taking the poor mans entire ss benefits away.
Congress needs to stop fighting and move to endorse the President's grand bargain. $4 trillion in debt reduction with both parties accepting compromise is the only smart solution on the table.
I agree with much said here, on both sides.
fernace made good points.
I'm ashamed that my Republican party has been highjacked by nitwits, and I just don't want to get a divorce from it: I want to influence it. I want to vote in its primaries.
I apologize for Boehner's behavior.
At the time of the first Tea Party demonstrations, I agreed with much that they said. Now I'm think that we ALL need to cooperate, from both sides, because our very big ship is sinking. I don't want to say, "then let's keep dancing," and I don't want to drown having a fight.
Everybody has to give up something.
RE: Debt Ceiling - It may be too late, but here is what needs to happen:
Both sides need to put forth a bill together that does only one thing: Raises the Debt Ceiling as of August 2nd, but will only go into effect if no other bill is approved to replace it. Every other bill that may represent a reasonable compromise would repeal/replace it.
This way, the future economic sanity and security of the USA are not held hostage, but the reputations of the House and Senate are held hostage - as it should be.
I support Obama. If he is the kind of leader I hope he is, he will bypass Congress, even if it means his losing the 2012 election. I don't think that would happen, however: I think he would win.
I keep thinking of LBJ's announcement that he would not run again.