After the U.S. House of Representatives passed the Cap, Cut and Balance Bill to solve the nation’s debt ceiling problem, the Democrat led Senate voted against it. Officials in the Obama administration has stated that a bill needed to be brought to the table by deficit plan deadline July 22nd, today, in order for it to pass all the hurdles in the two chambers and be passed and implemented by August 2nd, to prevent the United States from defaulting on its payments, leading to Moody’s downgrading the U.S. government to an Aa rating and causing markets to take a large hit.
As the deadline approached, Democratic lawmakers and President Obama and Republican lawmakers have been negotiating to come to a deal before the July 22nd deadline. The primary issue between the parties was how to cut the deficit before agreeing to a raise in the debt ceiling.
Republicans sought spending cuts equal to the size of the raise in the debt ceiling and possible reforms to broken tax codes. Democrats sought cuts to spending, but refused to agree to a deal if it did not include tax increases on the American public, which Republicans would not agree to as the American public is already hit hard by the economic situation, and taxes would worsen things.
The U.S. government hit the previous debt limit back and May and have been trying to work out a deal for months, but have been unable to come to an agreement, over the unwillingness to cut the deficit, raise the limit to avoid a default, but not include tax increases.
The Obama set deadline is today and after a proposal passed the House of Representatives, Democrats in the Senate rejected the Cut, Cap and Balance plan, leaving lawmakers with no proposal on the table and the deadline already here.