Federal Deficit | featured news

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.

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.

The International Monetary Fund call on US politicians to agree a "comprehensive solution" to raise the debt ceiling.

Scolded by President Barack Obama, Congress scrambled on Saturday to produce a deficit plan within 48 hours that keeps the United States from a catastrophic debt default now days away.

House of Representatives Speaker John Boehner broke off talks with President Barack Obama on Friday and said he will begin negotiations with Senate leaders aimed at meeting an August 2 deadline to avert an unprecedented U.S. debt default.

The Senate on Friday voted along party lines against the proposal to cut spending and raise the debt limit. President Obama pressed for compromise during a town hall meeting.