Congress, Federal Debt | featured news

Days after one high-stakes standoff over finances was resolved, the two sides are getting ready for another as Congress prepares to address the nation’s borrowing limit.

Flush with re-election vigor, President Barack Obama on Friday will provide his first public comments on the upcoming negotiations with Congress on how to deal with pending tax hikes and spending cuts that create the so-called fiscal cliff facing the economy at the end of the year.

With the clocks ticking down to deadline, it is becoming increasingly apparent on Capitol Hill that the supercommittee will not be able to reach its goal of cutting $1.2 trillion from the national debt.

House Speaker John Boehner says things have gotten a little "frosty" with President Obama in recent weeks, but he still hopes their parties can work together as Congress prepares to confront the federal debt problem. "The president and I have a pretty good relationship," Boehner said on ABC's This Week With Christiane Amanpour. "You know, it's been little frosty here the last few weeks. But we've got a pretty good relationship."

Members of the congressional deficit-reduction committee are cooling to the idea of completing a comprehensive overhaul of the tax code by their November deadline, making it more likely the details of any major tax changes will be handled later by House and Senate tax committees, according to congressional aides from both parties.

A key Republican leader assured Sunday that a congressional supercommittee will reach agreement on $1.5 trillion in cuts in government spending by next month's deadline and avert deep automatic measures.

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.

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.