Republicans refuse to lift debt ceiling until major cuts are made
The latest budget battle being waged between Republicans and Democrats concerns the $11.4 trillion debt ceiling. Most economists agree that if legislators don't raise the limit, the economic consequences would be disastrous and may even trigger another recession.
That hasn't stopped Republicans from turning down the proposal to raise the ceiling. Instead, party leaders have said that they won't move until major cuts are made.
"Increasing the debt ceiling without significant spending cuts and budget reforms will send a message to American job creators that we still are not serious about ending Washington's spending addiction," House Speaker John Boehner said, according to USA Today.
The Democrats have also voiced a desire to cut spending, but the real issue may be what to cut. Some analysts expect that the Republicans will use their clout to push some of House Budget Committee Chairman Paul Ryan's privatized Medicare program.
The U.S. Treasury has taken measures to extend the debt ceiling until August 2. Last night, the proposal to raise the ceiling without changes was rejected by a "wide margin," according to Fox News. A total of 318 legislators were against the bill in its current form, against 97 in favor.
As of this morning, President Obama asked for all House Republicans to join him in the East Wing of the White House to discuss how they can best compromise on the debt ceiling.
Vice President Joe Biden expressed confidence that the parties could reach a mutual agreement that would cut $1 trillion over the next 10 years and use several other measures to slash another $3 trillion. House Majority Leader, Eric Cantor, also seemed confident about the negotiations.
Several Democrats have become outspoken against their Republican counterparts. Representative Sander Levin (D-Mich) said that the Republicans were committing a "ploy so egregious that [they] have had to spend the last week pleading with Wall Street not to take it seriously and risk our economic recovery," the news source reports.