As the US Congress splits along party lines, pressure has grown on lawmakers to set aside their differences and compromise ahead of an August 2 deadline to raise the country's debt ceiling.
A day after the Democrat-led US Senate voted down a Republican bill passed in the House of Representatives, members of Congress were forced back into negotiations Saturday to wrangle out a deal that could save the country from a calamitous default on August 2.
But as the deadline draws closer, many in the US have grown fed up with Congress’s inability to reach an agreement on raising the country's debt ceiling. A July 18 Gallup poll found that two-thirds of US citizens wanted Congress to reach a compromise, even if the outcome didn’t reflect their own political convictions.
The continuing stalemate in Washington has prompted business associations, government organisations and cities to practically plead with lawmakers to hammer out a deal.
Business Roundtable, an association of CEOs from a number of major US companies, sent a letter to US President Barack Obama and Congress on Friday demanding that they “enact legislation now that raises the debt limit”, saying that “inaction poses an unacceptable financial risk to the nation’s economic growth and job creation”.
Even city governments have spoken up against the partisan politicking taking place on Capitol Hill. Several mayors from the state of Illinois, including Obama’s former chief of staff, Chicago mayor Rahm Emanuel, reportedly sent the president and lawmakers a letter pressing them to resolve the current crisis, stating, “We simply cannot handle another recession”.
As the August 2 deadline quickly approaches, some former lawmakers have confirmed the country’s worst fears: if there was ever a time to worry, it is now.
“This could be, really, a shutdown of the entire economy,” former Senate leader Tom Daschle, a Democrat, told the New York Times in an article published Friday. “You can’t be too hyperbolic about the ramifications of all this”.
If Congress fails to reach a compromise on raising the debt ceiling from $14.3 trillion before Tuesday’s deadline, the country will have reached its legal debt limit, meaning it will no longer be able to borrow cash from financial markets to pay its bills. A default could thrust the country back into recession and threaten an already fragile global economy.
The now-dead Republican bill, put forward by Speaker John Boehner, sought to raise the debt ceiling in two phases and asked for significant cuts in government spending, particularly in social programmes for the poor and the elderly that are dear to Democrats.
Although Democrats eventually agreed to the cuts, they rejected the idea of a limited short-term increase in borrowing capacity, to be followed by a second round of negotiations during campaigning for the 2012 presidential elections.
The bill was passed in the Republican-controlled House by a slim majority of 218-210, before it was killed in the Senate by a vote of 59-41.
Since Friday, Democrats have moved to push forward their own proposal, which Senate majority leader Harry Reid has revised, using elements from an earlier bill endorsed by Senate minority leader Mitch McConnell in an effort to woo Republican support. The House is expected to put the plan to a vote on Sunday.
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