Senate plan may avoid US default without Republican approval
Irish Sun Monday 18th July, 2011
• US will go into default from August 3rd
• Talks have stalled for days
• Senate leaders propose new plan that does not require Republican approval
A bipartisan plan to raise the US debt ceiling looked to be taking shape in the Senate Sunday, as the clock ticked toward a critical August 3rd deadline.
The plan would see the debt ceiling raised by US $2.5 trillion in return for US $1.5 trillion in spending cuts over the next ten years.
The debt ceiling would be raised through three votes over the next year, with no Republican backing and a symbolic resolution of condemnation toward Obama each time.
Rival Senate leaders, Mitch McConnell of the Republicans and Harry Reid of the Democrats hammered out the plan following days of talks at the White House, which produced no results.
President Obama and senior democrats had offered US $4 trillion in spending cuts over the next four years in return for the closing of tax loopholes for the extreme rich, an offer Republicans refused to accept.
The White House is still pushing for a “grand bargain” that would see the debt ceiling increased and a clear path to fiscal feasibility worked out, but a spokesperson said the latest plan might be a viable alternative to avert the US going into default.
President Obama has repeatedly called for a debt ceiling increase that would prevent the contentious issue rearing its head again in 2012, a crucial presidential election year, while the Republican Party has appeared eager to block that agenda in order to pain the president as a big spending liberal.
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