Debt Ceiling Basics

The Basics:
Current Debt Limit: $14.29 trillion
Default Deadlines: August 2nd
Increase Needed Through 2012: $2.4 trillion
Plans: Cuts, Taxes or Both in Exchange for Debt Ceiling Increase
The Plans:
Grand Deal: $4 Trillion in Deficit Reduction Over 10 Years
Reid Plan: $2.7 Trillion in Cuts Over 10 years
Boehner Plan: $2.6 Trillion in Cuts in Two Installments
Gang of Six Plan: $3.7 Trillion Over 10 years and Tax Reforms
Short-Term Plan: $1.5 Trillion to $100 Billion in Offsets
Backup Plan: Shifts the Approval Process

Debt ceiling negotiations fell apart this weekend, and now leaders from both parties are moving forward with alternative solutions and backup plans. Senate Majority Leader Harry Reid is drafting a plan that would include budget cuts meeting or exceeding the additional authorization in federal borrowing, and it would not include new revenues. Speaker of the House John Boehner is circulating a plan that would make spending cuts that are larger than any debt ceiling increase; implement spending caps; and advancing the Balanced Budget Amendment – without raising taxes. The Obama Administration opposes the Republican two-stage short-term proposal to raise the debt ceiling with an increase of about $1 trillion immediately and then again in a year depending on a deficit-reduction commission’s recommendations.

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