Friday, July 1, 2011

Democrats weigh short-term debt limit increase

(Reuters) - President Barack Obama and Senate Democrats are weighing a scaled-back U.S. budget deal that would avert a looming default but force Congress to tackle the politically toxic issue again before the 2012 elections, a Senate Democratic aide told Reuters on Thursday.
The deal would cover the country's borrowing needs for seven months, the aide said. That would theoretically include budget savings of roughly $1 trillion to attract the Republican support needed to pass it through Congress.
Congress must raise the $14.3 trillion debt ceiling by August 2 to avoid a default that could push the United States back into recession and send financial markets plummeting.

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