Debt Limit | featured news

Financial institutions across the country have begun preparing for a worst-case scenario if Congress fails to raise the nation’s borrowing limit, assembling plans to offer customers emergency loans or waive fees if their federal pay or benefits checks do not arrive on time. Navy Federal Credit Union, the largest in the country, said this week it would advance pay to direct-deposit members who are active-duty military or civilian employees of the Defense Department. It also said it would expedite approvals for lines of credit, overdraft programs and higher credit card limits.

As the nation stood Friday on the edge of a historic default and markets sank amid grim economic news and the legislative chaos, President Obama called on both Democrats and Republicans to abandon their favored debt-ceiling plans and come together to find a last-minute deal.

Failure of Republican House leadership to pass a debt-reduction bill gives Democrats the edge, at least for now.

A rising number of Democrats are asking President Obama to take executive action and raise the $14.3 trillion debt ceiling on his own, but Obama ...

The latest evidence on the economy suggests that the tense standoff between Congress and the Obama administration over raising the debt ceiling is coming at a terrible time — not in a period of robust or even passable growth, but at a time the U.S. economy is barely eking out any expansion at all.

In a televised address to the nation on July 25, 2011, to discuss the pending deadline on the debt ceiling, President Barack Obama made his pitch for a "balanced" approach to reducing the deficit -- one that includes spending cuts as well as revenue increases from tax increases for wealthier Americans. With the debt ceiling issue caught in a political deadlock over how to reduce the deficit, Obama noted that raising the debt ceiling has been a relatively routine exercise for decades. "Understand –- raising the debt ceiling does not allow Congress to spend more money," Obama said.

Standard and Poor's does not think the United States will default on its debt, the rating agency's president Deven Sharma said on Wednesday.

Americans already concerned about their jobs Wednesday begged Washington politicians to stop dithering, cut the budget and resolve a debt crisis they fear could lead to higher interest rates, or worse.

Could the U.S. lose its top credit rating even if a deal is reached to raise the debt limit? Market analysts and investors increasingly say yes. The outcome won't be quite as scary as a default, but financial markets would still take a blow. Mortgage rates could rise. States and cities, already strapped, could find it more difficult to borrow. Stocks could lose their gains for the year.

Rival Democratic and Republican plans to raise the government's borrowing ability have thrust Congress into a standoff just one week away from a potentially devastating debt crisis.