July 6th, 2011, By Dana Haugh
So far Congress has rejected the pleas for a temporarily increased debt ceiling, intent on forcing congressional leaders to “come up with a broad agreement . . . in order to avoid a government debt default in August.” However, if a decision isn’t reached soon, a default could have a deafening impact of the US 
Dollar. Vice President Biden has led numerous talks, producing one notable agreement that would cut at least $1 trillion from budget deficits “over the next 10-12 years . . . [it would be] the biggest debt-reduction package since at least the start of the Clinton administration.” Among other debt reducing actions, consideration has fallen on drawing around $200 billion in savings from federal worker pensions and farm subsidies and around $800 billion from domestic agencies over the next 12 years. New tax revenues and Medicare cuts are also on the table, but these issues are being met with a lot of conflict from the opposing parties. While the Republicans demand health care cuts, the Democrats remain steadfast in their position to protect senior health benefits. But the majority vote in the house is quite clear- Republicans and Democrats are wary of increasing the already surpassed debt limit.
Obama cited the letter Republican Ronald Reagan wrote to Capitol Hill in 1983 when he demanded a debt limit increase, in attempts to showcase the severity of the outcome, should the government fail to increase the debt limit. Part of the letter said, “The risks, the costs, the disruptions and the incalculable damage lead me to but one conclusion: The Senate must pass this legislation before the Congress adjourns.”
It is highly unlikely that the ultimate decision for the economic future will be met with approval from both sides; however, the majority vote will have to suffice if any progress is to be made. The deadline looms nearer—August just a month away.
Check out this helpful video to understand the federal debt and how we got here- Courtesy of the Washington Post
All information gathered from the Washington Post