Wednesday, July 27, 2011

Impasse on debt ceiling deal drags into critical week

One week before the United States government could default and enter uncharted economic territory, Democrats and Republicans remain at a stalemate on how to reach a debt ceiling deal.
A vote on a Republican plan originally expected for Wednesday was postponed Tuesday after the Congressional Budget Office said it failed to reduce spending and deficits as much as advertised. The proposal was unveiled Monday by House Speaker John Boehner.
A spokesman for the Ohio Republican said aides are looking at rewriting the plan. A congressional source told CNN on condition of not being identified that the vote was being postponed until Thursday at the earliest.
While political leaders continued sniping at each other's latest proposals, conservative Senate Republican Leader Mitch McConnell called for renewed negotiations with President Barack Obama and indicated his party must be willing to move away from some of its

We are going to have to get back together and get a solution here," McConnell said of formal talks with the White House and congressional Democrats. "We cannot get a perfect solution, from my point of view, controlling only the House of Representatives. So I am prepared to accept something less than perfect because perfect is not achievable."
In addition, Boehner's plan appeared in danger of failing to get passed by the GOP-controlled House, which would weaken the party's negotiating leverage on a final deal.
Conservatives -- including some House and Senate Republicans and the Club for Growth, an anti-tax group -- have criticized the Boehner plan for not doing enough to tackle the nation's mounting deficits and debt.
"I'm not voting against the speaker, but I'm voting against this plan," Rep. Jim Jordan, a fellow Ohioan who heads the conservative Republican Study Committee, told CNN. Asked if Boehner had the votes to pass the measure in the chamber he leads, Jordan said: "I don't think so now."
In a letter to their House colleagues, a group of conservative senators harshly criticized the Boehner plan as insufficient and called on Republicans to reject it in favor of the "cut, cap and balance" plan previously passed by the House and dismissed by the Senate.
"For many reasons, we cannot support this bill and urge you to protect the American taxpayers by strongly opposing this bill," said the letter from Republican Sens. Jim DeMint of South Carolina, Rand Paul of Kentucky, Mike Lee of Utah and David Vitter of Louisiana.
If Congress fails to raise the $14.3 trillion debt limit by August 2, 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 analysts have warned of a potential stock market crash and a downgrade of America's triple-A credit rating.

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