Boehner & Reid working on debt plans

July 26th, 2011 - 7:28 pm ICT by Aishwarya Bhatt  

Washington, July 26 (THAINDIAN NEWS) There have been rival plans from Democrat and Republican lawmakers regarding how the US debt crisis should be handled. House Speaker John Boehner and Senate Majority Leader Harry Reid have presented different plans and each side doesn’t seem ready to back down on their terms.

In the plan of Boehner, the US debt ceiling should be raised by $900 billion and that should be accompanied by spending cuts of more than $1 trillion. The plan has been described by the Democrats as a “nonstarter” because they argue that it is a short term approach which will fail to solve the debt crisis in the United States.

In the plan unveiled by Reid, the Democrats propose that the tax ceiling should be raised. The plan also calls for serious cuts to be made regarding US military spending. A total of $2.7 trillion could be saved over a period of ten years if Reid’s plan is successfully implemented. He also assures that the plan would prevent another debt vote in 2013.

US could default on its debt obligations if Congress fails to raise the tax ceiling. Under the current law, the country cannot borrow above $14.3 trillion. The US debt is expected to reach that limit on the 2nd of August. It will be the first time that the US has defaulted on its debt repayment if Congress and the White House fail to reach a deal.

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