This past Friday, the Republican House speaker John Boehner broke off talks with President Obama on getting a budget deal to avert a government default, which prompted an emergency meeting Saturday. The President keeps us informed on the latest progress.
Mr. Boehner originally broke talks saying that Mr. Obama wanted to raise taxes too high and won’t make “fundamental changes” to benefit the programs he wanted. Top Republican aides said Mr. Boehner then went to work with Senate leaders on an alternative aimed at bringing about a better solution. Obama and congressional leaders remain in ongoing talks to deliver a plan to cut spending.
On Saturday the talks continued with the hopes of reassuring the markets after the breakdown of the federal budget negotiations. Congressional leaders were working on a deal that could potentially cut $3 trillion to $4 trillion in spending over the next 10 years.
“We are working, and I’m confident there will be resolution,” Mr. Boehner told fellow House Republicans on an afternoon conference call, according to participants. “There has to be.” This is true as there is only a little more than a week until the federal government defaults on its debts if they do not.
It is analogous to a consumer who has reached a credit card’s limit with no funds to pay it off and the issuer refrains from extending more credit. Of course, this can all be avoided if Congress agrees to increase the $14.3 trillion debt ceiling.
The Republican party is pushing for cuts to Medicare and Social Security while Democrats are focusing on increasing tax revenue.
The current United States debt limit will be reached in early August, warned United States Treasury Secretary Timothy Geithner. The country’s debt ceiling has fluctuated up and down over the course of the past century but for a majority of the time, it went up.
Watch the President’s news conference on Monday night at 9:00 PM EST below: