Debt ceiling struggle enters critical phase

[Geee]

Washington Examiner:

With about two weeks left until an Aug. 2 deadline to raise the nation's borrowing limit, Congress this week will embark on a series of votes that will demonstrate just how far apart Democrats and Republicans are on finding a compromise on the debt ceiling.
The top two leaders in the Senate, meanwhile, are collaborating on a plan that could pave the way to a final compromise, though it could lack support from the conservative Republicans who dominate the House.

Beginning Tuesday, both the House and Senate will take up a GOP plan that would block a debt ceiling increase unless Congress passes a balanced budget amendment. The measure, called "cut, cap and balance," has widespread support from Republicans, particularly fiscal conservatives and freshmen backed by the Tea Party whose goal is to rein in federal spending.

But the measure is not likely to garner the two-thirds majority needed for passage because Democrats believe the decision to raise the debt limit should be left to Congress. Democrats want a plan that includes new revenue through tax increases.

With Aug. 2 looming, the top leaders in Congress have signaled they do not want Aug. 3 to arrive without a debt limit deal.

Treasury Secretary Tim Geithner is seeking an increase of approximately $2.4 trillion, which would provide enough borrowing power to last through the 2012 election cycle. President Obama has pledged to veto a short-term measure.

Jacob Lew, director of the White House Office of Management and Budget, warned on CNN's "State of the Union" that the Aug. 2 deadline is real despite claims by some Republicans that the White House is using scare tactics to force a deal.

"This is a different situation than the United States has ever faced," Lew said. "We have never gone into a situation where we didn't have enough money to pay our bills."

Senate Minority Leader Mitch McConnell, R-Ky., and Majority Leader Harry Reid, D-Nev., are currently in talks about a "last choice option" that would allow Obama to raise the debt ceiling by $2.5 trillion.