Congress, Federal Debt | featured news

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 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.

A senior banking regulator urged Congress to raise the federal debt ceiling to prevent a "calamitous" government debt default.

Top congressional Republicans on Sunday suggested they could compromise on the two biggest issues -- healthcare and taxes -- that stand in the way of a deal to get the United States' debt under control.

Treasury Secretary Timothy Geithner warned in a letter to Congress that failure to raise the $14.294 trillion debt ceiling would drive up interest rates, push down household wealth, put more pressure on federal entitlement programs and cause a double-dip recession.

With high gas prices and federal deficits in the political spotlight, senior Democrats believe that Senate Republicans will support an idea they otherwise might not like.

The United States could hit the legal limit on its ability to borrow as soon as March 31 and faces serious consequences unless Congress acts by then to raise it, Treasury Secretary Timothy Geithner said on Thursday.