Debt Deal Continues As Deadline Approaches

Congressional leaders and Obama continued talks today over the heavily debated Debt Plan, whose goal is to drastically reduce the deficit and raise the debt ceiling. The underlying problems in reaching a deal thus far is a disagreement in how to reduce the deficit. Republican lawmakers desire to have large cuts in spending, reform of broken social programs and a possible revision of the tax code, while the Democratic counterpart is willing to have lesser cuts, but want tax increases to accompany them.

 

In a 90 minute interview with reporters after today’s meeting, Obama said talks are expected to continue through the weekend to work out a debt deal before the July 22nd (at latest) deadline to get a bill passed by August 2nd. Obama and top Republican leaders including John Boehner are expected to meet Sunday to continue negotiations.

 

While debt ceiling debates are usually fast up and down votes, this time around it has been a partisan issue. Republicans know the debt has reached a level far too high to be continued and the debt is a constant burden to the tax payer. With weeks of debating already down, it looks like there is still a lot of work to do; Obama said today, “I want to emphasize that nothing is agreed to until everything is agreed to and the parties are still far apart on a wide range of issues.”

 

While he may feel this way, Speaker Boehner is standing strong on the tax issue. Republicans are “not interested in raising taxes.” Tax reform, however, is on the table, with an overhaul of the tax code needed. “We believe that comprehensive tax reform, both on the corporate side and the personal side, will make America more competitive, help create jobs in our country, and is something that is under discussion,” Boehner said.

 

Since the Republican leaders are showing flexibility on taxes, President Obama has expressed interest to the negotiators to double their deficit reduction goal to $4 trillion over 10 years.  The Debt Deal still has a lot of work to go before an agreement will be made. Will the United States Default?

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