Debt Ceiling Negotiations and the Fear of Default

With Democrats angry at him for offering spending cuts and Republicans adamant about higher taxes, President Obama is trying to look like the only adult in Washington. Three different options have been proposed for breaking the political deadlock over the debt ceiling. Republicans call theirs' "Cut, Cap and Balance." The President wants a "Grand Bargain." The Democratic and Republican Senate leaders have a compromise that would let the President increase the ceiling even while Congress says, "No." On Friday, that compromise seemed the most likely but today, ABC News reported that the "Grand Bargain" might be back on the table. We look at the politics behind increasing the debt ceiling to avoid another recession.

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