Federal Debt | featured news

The Federal Aviation Administration was forced into a partial shutdown Monday after Congress failed to temporarily extend its funding. The agency was ordered to furlough thousands of employees and freeze $2.5 billion in airport construction money.

Top Republican lawmakers and the Obama administration’s budget director both predicted Sunday that an agreement would be reached before the federal government defaults on its debt in early August, but both sides continued to squabble over the details of competing proposals, offering little evidence that a deal was at hand.

President Obama continued to push for a $4-trillion deal to rein in government deficits Sunday, but a White House meeting with congressional leaders failed to break the deadlock over spending and taxes that has stalemated discussions for more than a month.

Republicans would accept a “mini” deal with the Obama administration on raising the debt limit, Senator John Cornyn of Texas, a Republican leader, said. Cornyn said today on “Fox News Sunday” that while Republicans would prefer a long-term settlement, they would accept a shorter-term agreement if that’s all they could get done. The U.S. Treasury Department has projected that on Aug. 2 the U.S. will no longer be able to meet obligations if the legal debt ceiling isn’t raised.

President Barack Obama pressed his case on Saturday for achieving deficit reduction, in part by ending tax breaks and singling out hedge fund managers, oil companies and billionaires to take the hit.

Regardless of any tax concessions President Obama achieves, the end result would favor Republican goals of cutting spending and government services. Even as the political battle mounts over federal spending, the end result for federal policy is already visible — and clearly favors Republican goals of deep spending cuts and drastically fewer government services.

The United States would immediately have its top-notch credit rating slashed to "selective default" if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Vice President Joe Biden said Saturday the Obama administration wouldn't let middle class Americans "carry the whole burden" to break a deadlock over the national debt limit, warning that the Republican approach would only benefit ...

President Barack Obama and Vice President Joe Biden will meet Monday with Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell to discuss "the status of the negotiations to find common ground on a balanced approach to deficit reduction," according to the White House.

Democratic leaders called on Wednesday for new spending and tax cuts to boost the sluggish U.S. economy, setting up a fresh hurdle for bipartisan efforts to head off a government debt default this summer.