Debt Deficit Deadline
July 18, 2011 by USA Post
Debt Deficit Deadline, With five days remaining before the term of President Barack Obama to an agreement to raise U.S. debt ceiling, Republicans and Democrats have yet to agree on a grand plan to reduce the deficit in the nation and increase debt limit in time to avoid an unprecedented U.S. default.
Efforts to reach a broad agreement on deficit reduction in a deadlock over tax breaks that lawmakers – with an eye on elections in 2012 – hold on to entrenched positions.
This week, senators will probably go ahead with a plan that would authorize potential return more borrowing capacity and could also include some spending cuts.
Obama had a deadline Friday by congressional leaders of both parties to agree on a deal to raise the debt ceiling in the country. He said the July 22 deadline would give Congress enough leeway to write and approve a bill before the August 2, when the government will run out of money to pay their bills.
Failure to increase the debt ceiling by then could send shock waves through global financial markets and could sink the U.S. into a new recession, economists have warned.
Credit rating agencies have indicated that you can cut the top first class AAA U.S. if the debt ceiling is not high and the deficit reduction measures are not prepared.
Leaders of both parties agree on the need to raise the debt ceiling. However, they disagree on how to get there.
The Republicans want an agreement to cut the deficit before the vote in favor of increasing the debt limit, but they do not like the Democratic proposals to raise taxes on the wealthiest Americans.
The White House budget director Jack Lew said he was optimistic an agreement would be reached the debt limit and raised in time.
“As we approach it more and more (members of Congress) is coming to that,” said Lew CNN on Sunday. “There will be a band that believe that playing with Armageddon is a good idea. I do not think that’s where most will be.”
Obama held talks at the White House with congressional leaders for five days last week. But speaking from the White House were included in the official program of Obama on Monday.
No formal talks on the weekend, but Senate Republican leader Mitch McConnell and Democratic Leader Harry Reid were negotiating a plan that would allow Obama McConnell to raise the debt limit without affecting the Republicans have to take the political vote in favor of the toxics.
Reid is seeking some changes to the plan attractive to Democrats, including U.S. dollars and 1.5 billion in spending cuts.
Top aides said the Senate Democrats are likely to begin to consider the commitment to “Plan B”, as this week. It is expected that the Democratic-led Senate to approve legislation, but winning the Republican-led House of Representatives would pose a major challenge.
“CUT, CAP AND BALANCE”
House of Representatives, John Boehner, the top Republican in Congress, has scheduled a vote Tuesday on its “short, cap and balance” plan, which would determine an increase in the debt limit on the approval of a constitutional amendment to require the federal government to balance its books every year.
This project has little chance of approval in the Senate, but could buy some goodwill with the Conservatives to allow time for the passage of a compromise, as McConnell’s plan.
The discussion about the debt ceiling, marked by dueling press conferences during the last week in Congress is weighing increasingly on the financial markets.
“The flow of news (this) week to address the problems of deficit and political posturing that is taking place is going to be intense and really going to drive these markets,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
“People are starting to get nervous about what they’re seeing out there,” he said.
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