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Raising Debt Limit? Subject to Negotiations

According to Senate Majority Leader Harry Reid, the current negotiations taking place on a way of escalating the debt limit, “still had a way to go.”  They were pushed off until last Sunday in a “test vote on a Democratic deficit reduction bill.”  Right now, the White House is hoping for “as much time as possible” in order to come to a “bipartisan compromise” that will enable the government to increase its $14.3 tr. borrowing limit by the deadline on Tuesday and “avoid a default.”  Although there is still what to be done, negotiations had been occurring between leaders of the Republican and Democratic parties, along with the White House.

Negotiations and Test Votes

A test vote was scheduled for today on the debt limit plan which has been opposed by Republicans who said they could have blocked it.  But according to Reid, the vote was delayed in an effort to provide additional time for negotiators. To end debate it is going to need 60 “yea” votes.  One of the main issues currently facing Reid and his supporters is trying to get the deal happening before the opening of Asian markets which would be prior to 5pm EDT last Sunday, which, according to the report in Reuters, renders the timeframe “very tight.”

Although prior to this there was confidence from House Speaker John Boehner and Senate Republican leader Mitch McConnell that the forging of a bipartisan deal could follow “a week of bitter stalemate,” there was nonetheless “no clear sign that an agreement was near,” which is problematic.  Republic leaders discussed the matter at length with the president last week which was viewed as a “positive step as the White House had remained sidelined from acrimonious partisan sparring during the week.”

Consequences of No Increase

If the debt ceiling is not increased by Tuesday, the government will no longer be able to borrow more and could thus “quickly run out of money to pay all its bills.”  McConnell insists that America will not “default for the first time in its history – that’s not going to happen,” he said.

So, the hope has to remain that authority will be given to raise the debt ceiling.

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