Senate Republicans offer fallback option to the debt ceiling impasse, proposing three short-term increases in the amount the government can borrow.
WASHINGTON – U.S. President Barack Obama says he cannot guarantee that there will be money to pay millions of pension checks scheduled to go out on August 3, unless a deal can be made with opposition Republicans on difficult debt issues, Voice of America reported. He spoke in a television interview by CBS, which put some of his remarks on its website Tuesday.
Obama and Republicans in Congress have sharply different ideas on how to raise the USD 14.3 trillion legal limit on the amount of money Washington can borrow, and they have to reach an agreement by August 2. Otherwise, they face the possibility that the United States would have to default on some payments.
Obama held another in a long series of negotiations with congressional leaders Tuesday, but the two sides appeared to be growing further apart before the talks began.The top Senate Republican, Mitch McConnell, said it may not be possible to get a long term solution to the budget problem as long as Obama is in office.
Senate Republicans offered a politically inspired fallback option to the debt ceiling impasse Tuesday, proposing three short-term increases in the amount the government can borrow while at the same time registering the disapproval of Congress for such a move.
The proposal would give President Obama power to raise the debt ceiling, but also would require three congressional votes on the issue before the 2012 general election. Obama said Monday he would reject any short-term extension of the debt ceiling, as called for in the Senate Republican plan, according to the CNN.
Senate Minority Leader McConnell told reporters that the proposal was intended to ensure a debt ceiling increase if no agreement is reached to raise the borrowing limit by August 2 to avoid a government default.
The president proposes a USD 4 trillion package of spending cuts and revenue increases over 10 years, but the Republicans say they will not allow tax increases and want to focus only on cutting government spending. Democrats strongly oppose cuts in popular social programs for the poor and elderly. They say raising taxes on the wealthy and big corporations is essential because the government needs more revenue to close the budget gap. Republicans say it makes no sense to raise taxes on wealthy people who can invest in the economy and create jobs. The speaker of the House of Representatives, Republican John Boehner, has said no deal can pass the House unless it rules out tax increases and cuts spending.
Treasury Secretary Timothy Geithner said Tuesday the two sides understand what it will take to reach a deal and come to an agreement. He has warned previously that failing to raise the USD 14.3 trillion legal limit on what the government can borrow to pay its debts would be “catastrophic.” Talks were expected to continue yesterday.