Federal Debt Mess Continues

Monday, July 25, 2011 - 3:49pm

The bitter fighting over spending and taxes continues as the US Government faces default on T-Bill bonds in a week.

With a week left, President Obama was with Latino activists at midday -- on the sidelines after a weekend of failing to cut a bipartisan deal

"Believe me, the idea of doing things on my own is very tempting”, joked Obama

He still wants a plan that hikes taxes to avoid deep Medicare cuts

"That the best way to take on our deficit is with a balanced approach”, said Obama. “One where the wealthiest Americans and big corporations pay their fair share, too."

But balance looks dead for now on Capitol Hill.

House Speaker Boehner is proposing raising the debt ceiling and cutting spending 2.5 trillion thru 2012 -- in two stages -- with no tax hikes.

That's the Republican offer.

"We laid out framework: no new taxes and we will not raise the debt limit more than we actually find cuts", said Rep. Kevin McCarthy (R-CA).

Senate Democratic leader Reid would hike the borrowing limit & cut spending 2.7 trillion in two steps -- vote now, then again with matching cuts and no tax hikes.

"Any serious debt reduction plan must include revenues, but in the interest of preventing a default, we can have the fight on revenues later", said Sen. Chuck Schumer (D-NY).

House Democrats said just make the deal.

"Find common ground, lift the debt ceiling and let's restore stability in the lives our citizens", advised Rep. James Clyburn (D-SC).

But both party's proposals running just through next year guarantees the spending and taxes fight will surely dominate the 2012 campaign.

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