Debt Limit Controversy Still Not Resolved

After a weekend of intense negotiations, there is -still- no agreement between the White House and Congressional negotiators on a plan to raise Washington's debt limit.
One week from tomorrow the United States WILL default on its debt, if no deal is reached.

Lawmakers are expressing their frustration at a lack of agreement on a deal to raise the nation's debt ceiling.

(Rep. Earl Blumenauer from Oregon said, "This doesn't have to be so hard. It doesn't have to risk knocking the economy into another tailspin."

Congressional democrats and republicans are now crafting separate proposals.

House speaker John Boehner is pushing a two step plan that would lift the debt limit one trillion dollars now. And tie the full increase to his deficit reduction proposal. The Obama administration says the short-term fix - won't work.

US Treasury Secretary Timothy Geithner said, “"we can’t adopt an approach that leaves the threat of default over the country 6 months from now that would be deeply irresponsible to do."

On the senate side, majority leader Harry Reid's plan would keep the u-s from defaulting until 20-13, with $2.7 trillion in spending cuts.

What plan has the best chance of ending the standoff by august second, and avoiding a government default is still a question mark.
What we do know - the ticking clock is starting to make an impact.

World financial markets have shown their anxiety as the deadline approaches.

Credit ratings agencies have threatened to downgrade the government's triple a credit rating.

That would mean higher interest rates on government borrowing, and consumer loans.

senior writer for Bloomberg Businessweek Roben Farzad said, "You are going to see banks not wanting to make loans, car dealerships not wanting to extend credit and everybody is going to feel it."

All sides hope for a last minute deal. If legislation is introduced today - it still has a chance of passing congress before the deadline.

President Obama cancelled some fundraising appearances tonight as the White House tries to work with lawmakers to find a solution. The President continues to push for a plan that includes raising more revenue by letting tax cuts for wealthy Americans expire.

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