US's no-default deal elusive
Source: Agencies |
July 22, 2011, Friday
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AN immediate deal to prevent the United States from falling into a devastating default remained out of reach yesterday as political factions - congressional Republicans, Democrats and President Barack Obama - remained unable to overcome differences on spending and taxes.
The Democratic-controlled Senate is all but certain to kill a tea party-backed bill passed in the Republican-controlled House of Representatives earlier this week. The legislation insists on deep government spending cuts and congressional passage of a constitutional balanced budget amendment in return for raising the US debt ceiling by August 2.
And a Senate plan resurrected by the so-called "Gang of Six," a bipartisan panel of three Republicans and three Democrats, lost much of its luster yesterday after members of Congress from both parties heaped criticism on the measure. Obama said on Tuesday that the deal met the broad outlines of his vision for reducing the debt.
One small opening appeared on Wednesday when White House spokesman Jay Carney said Obama would agree to a short-term debt ceiling increase - for a matter of days - but only if a plan like the one drawn up by the Senate panel was already agreed to in principle. Obama had previously insisted he would veto any interim measure. He is looking for a comprehensive deal that includes big spending cuts and large increases in tax revenue.
Many Republicans pledged to constituents they wouldn't raise taxes and to lower them when possible.
An interim deal that could produce a fallback compromise is the work of Senate Minority Leader Mitch McConnell. It would give Obama broad new powers to obtain increases in the government's borrowing unless blocked by veto-proof two-thirds margins in both the House and Senate. It calls for modest spending cuts and no new tax revenues.
Many conservative Republicans are in an uproar over the McConnell plan, and more than 70 House members signed a letter promising to oppose the proposal.
The Democratic-controlled Senate is all but certain to kill a tea party-backed bill passed in the Republican-controlled House of Representatives earlier this week. The legislation insists on deep government spending cuts and congressional passage of a constitutional balanced budget amendment in return for raising the US debt ceiling by August 2.
And a Senate plan resurrected by the so-called "Gang of Six," a bipartisan panel of three Republicans and three Democrats, lost much of its luster yesterday after members of Congress from both parties heaped criticism on the measure. Obama said on Tuesday that the deal met the broad outlines of his vision for reducing the debt.
One small opening appeared on Wednesday when White House spokesman Jay Carney said Obama would agree to a short-term debt ceiling increase - for a matter of days - but only if a plan like the one drawn up by the Senate panel was already agreed to in principle. Obama had previously insisted he would veto any interim measure. He is looking for a comprehensive deal that includes big spending cuts and large increases in tax revenue.
Many Republicans pledged to constituents they wouldn't raise taxes and to lower them when possible.
An interim deal that could produce a fallback compromise is the work of Senate Minority Leader Mitch McConnell. It would give Obama broad new powers to obtain increases in the government's borrowing unless blocked by veto-proof two-thirds margins in both the House and Senate. It calls for modest spending cuts and no new tax revenues.
Many conservative Republicans are in an uproar over the McConnell plan, and more than 70 House members signed a letter promising to oppose the proposal.
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