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[UPDATE] U.S. Debt Deadlock

By: Associated Press, CBS
By: Associated Press, CBS

UPDATE 7-27 7:44AM --

Lawmakers will have to wait another day to vote on House Speaker John Boehner's debt ceiling plan.

House members were suppose to take up the measure today. (7-27)

But Boehner is scrambling to re-write it after budget officials determined the proposal would NOT cut one-point-two trillion dollars from the deficit as promised.

Rep. Jim Jordan says:

"We think there are real problems with this plan..."

The delay could give Boehner more time to rally votes, some in his own party are demanding deeper cuts.

But the plan still faces a dead end in the Senate.

Sen. Harry Reid:

"Democrats will not vote for it. Democrats will not vote for it. Democrats will not vote for it."

The White House says President Obama will veto Boehner's plan if it reaches his desk. Instead, the President is leaning towards senate majority leader Harry Reid's proposal.

White House Press Secretary Jay Carney says:

"I think the President made it clear that the option that the majority leader put forward was a better option than the speaker of the house put forward."

Reid's plan would raise the debt ceiling enough to keep the government going through 20-13.

But neither proposal includes tax increases, something President Obama has said he wants.

"It does not contain within it upfront revenues and guess what, that's a compromise!"

With an August 2nd deadline looming, lawmakers aren't just up against the clock.

Following President Obama's plea Monday night, Americans have been jamming the phone lines on Capitol Hill, urging Congress to get the job done.

In what could be a sign the Obama administration is preparing for a default... officials have summoned leaders of veterans organizations to the White House today. They plan to brief them on how veterans benefits might be impacted if lawmakers don't reach a deal in time.

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UPDATE 7-26 7:48AM

President Obama called for compromise in his primetime address Monday night. With just one week to go until the deadline to raise the debt ceiling, he's blaming Republicans for the deadlock

"A significant number of Republicans in Congress are insisting on a cuts-only approach, an approach that doesn't ask the wealthiest Americans or corporations to contribute anything at all."

But, G.O.P. leaders argue the President is the one who won't budge.

Rep. John Boehner says:

"the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen."

President Obama endorsed Senate Majority leader Harry Reid's new proposal.

It calls for a one time increase of the debt limit through 2012, two-point-seven trillion in spending cuts and no tax increases.

Republicans are pushing a two step process. Raise the debt limit enough to last through the rest of this year then form a joint committee to tackle a second increase and more spending cuts.

It's not clear if either deal has enough support to pass both houses. But, President Obama has vowed to veto any plan to raise the debt ceiling in two waves.

There are real consequences if a deal isn't reached by next Tuesday.
The value of the U-S dollar could take a hit and the government may not be able to pay some of its bills.

The President urged Americans to get involved.

"If you believe we can solve this problem through compromise, send that message."

Both parties insist the country will not default on its loans.

The world financial markets are keeping a close eye on the debate in Washington. Asian markets rose slightly at Tuesday's opening as the international community is still holding out hope US lawmakers will reach a compromise.

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UPDATE 7-25 7:36AM

Republicans and Democrats are still at an impasse and will now unveil dueling plans to raise the nation's debt ceiling.

House Speaker John Boehner told his his rank and file during a conference call Sunday - - it's time to make some sacrifices But, he's staying firm to his demands.

"Well, there will be a two-stage process, it's just not physically possible to do all of this in one step. "

Boehner's plan is expected to include a short term extension with spending cuts and another extension and more cuts down the road.

After a meeting with the President, Senate Majority Leader Harry Reid made it clear that's not a viable option saying,

"Speaker Boehner's plan, no matter how he tries to dress it up, is simply a short-term plan, and is therefore a non-starter in the Senate and with the President."

Reid says his proposal will address republican concerns. It will likely raise the debt ceiling by more than two trillion dollars through 2012, include spending cuts and do it without raising taxes.

The deadline is next Tuesday. So, the House and Senate have to act quickly. Both have a goal to take up legislation by the end of the week.

The world markets are reacting negatively to the deadlock in Washington.

While in Hong Kong, Secretary of State Hillary Clinton told foreign business leaders America will meet its deadline.

"Let me assure you, we understand the stakes. We understand how important this is to us, and how important it is to you. "

But, If lawmakers don't reach an agreement by August second the U-S could default on its financial obligations for the first time.

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UPDATE 7-24 5:00PM

WASHINGTON (AP) -- President Barack Obama will meet with the top
Senate and House Democrats Sunday night amid the nation's deepening
political standoff over the federal debt.

The White House said late Sunday afternoon that Obama had
invited Senate Majority Leader Harry Reid and House Democratic
leader Nancy Pelosi to the Oval Office.

Both parties are scrambling to come up with a plan to avert an
unprecedented government default.

The nation will run out of borrowing power and will be unable to
pay its obligations if the debt ceiling is not extended by Aug. 2.

House Republicans and Senate Democrats readied rival emergency
fallback plans Sunday as bipartisan talks deadlocked. Congress and
the White House are seeking ways to cut the deficit in tandem with
expanding the borrowing limit.
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UPDATE 7-24 12:30PM

WASHINGTON (AP) -- House Speaker John Boehner says he's working
to get out a two-part plan to raise the nation's debt limit, but he can't say whether it will include Democratic support.

Boehner tells "Fox News Sunday" that he hopes to have a bipartisan approach to solve the problem, but he's ready to move forward with a Republican plan if a deal couldn't be reached.

The speaker flatly rejects the White House insistence that the plan get the country through the next election instead of offering a short-term fix while a longer-term solution can be worked out.

He says it's "not physically possible to do all of this in one step."

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WASHINGTON (AP) -- Treasury Secretary Timothy Geithner says congressional leaders are putting together a framework for raising the nation's debt limit with a goal of announcing a deal before Asian markets open Sunday afternoon.

US officials worry that a lack of significant progress on the debt ceiling and other debt issues would roil worldwide markets when they open for business.

Geithner tells ABC's "This Week" that congressional leaders in both the Republican and Democratic parties insist that the debt limit will be raised before the default deadline of Aug. 2. He says President Barack Obama still demands that any agreement extend beyond the 2012 elections.

Negotiations between the White House and congressional leaders have reached a crisis point with disputes over spending cuts and additional tax revenue.

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WASHINGTON (AP) -- Republican lawmakers say House Speaker John
Boehner has told them he hopes to have a "viable framework" for raising the nation's debt ceiling by 4 p.m. Eastern time tomorrow. That would be before stock markets open in Asia.

But a meeting Boehner convened Saturday evening with House
Democratic leader Nancy Pelosi, Senate Majority leader Harry Reid
and Senate Republican leader Mitch McConnell has ended with no word
of a deal. That followed a brief meeting at the White House this
morning between the four congressional leaders and President Barack
Obama.

Congress is facing an Aug. 2 deadline to raise the debt limit
and head off an unprecedented government default. But lawmakers are
expressing fear that the prospect of a default could start to
affect markets even before it becomes reality, undermining investor
confidence in U.S. stocks and bonds and triggering a worldwide
plunge.


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