The United States Senate has canceled their Independence Day recess to continue negotiations in the upcoming days in hopes of passing a compromise that includes raising the debt ceiling. Two Democratic officials familiar with the process have warned that if no deal is met by July 22nd, so that it can then be passed, the United States will default and be unable to pays its debts.
This date is set due to restrictions placed on debating and presenting legislation. For the passage and implementation on August 2nd, the date the U.S. Treasury predicts it will no longer be able to pay its bills, a deal must be reached in advance to have advanced publication, as per congressional rules.
The overwhelming issue with writing of such a bill is the failure to come to an agreement on how it should be done. Republican law makers have argued a budget should be closer to being balanced, with drastic spending cuts. However, Democratic officials wish to increase taxes in economic hard-times, something Republicans will not agree with.
Despite the threat from Standard and Poor’s chairman of the company’s sovereign rating committee, John Chambers, that in the event of a default the U.S. rating would be reduced to “junk status,” Obama refused an invite by Senate Minority Leader, Mitch McConnell to continue discussions for reaching a deal.