The House is set to vote on a Republican plan to raise the debt limit in exchange for huge spending cuts. President Barack Obama said that he would veto the bill if both chambers of Congress will pass the measure. debt obama

The standoff highlighted the symbolic nature of the Republican-sponsored proposal while behind-the-scenes negotiations are still going on in order to avoid a federal default. The meetings centered on a Senate plan to give Obama the power to increase the debt limit until 2012. It also includes budget cuts amounting to $1.5 trillion that were approved by Democratic and Republican negotiators.

Senate leaders said that the chamber will be in session until the weekend as the negotiators try to come up with an agreement that would give the government authority to borrow more. If an increase to the debt ceiling is not made until August 2, the Treasury Department warned of a default and could affect the economies of countries around the world. Uncertainties about the United States deficit as well as unsettled European debt issues resulted in the decline of U. S. and overseas stocks last Monday.

The House vote is scheduled on Tuesday and centers on the cut, cap and balance plan of the GOP. According to the proposal, spending cuts of $111 billion in 2012 will be made and cap future costs would be 19.9 percent of the nation’s gross domestic output.