The legislators are still trying to come up with a deal that would raise the $14.3 trillion debt ceiling by August 2 to prevent a credit default from happening. According to United States House of Representative Speaker John Boehner, the House Republicans are prepared to push their own deficit reduction plan if congressional leaders fail to agree on a bipartisan plan. With time running out, the Senate would have no choice but to accept anything that the Republican-led House passes this week. debt negotiations

White House Chief of Staff Bill Daley said that short-term deals can only hurt the economy more because financial markets and business leaders would not have the security to make any investment decisions. The Democrats want to implement a debt ceiling extension through the 2012 presidential election.

Treasury Secretary Timothy Geithner stated that it is vital that the threat of default is removed for the next 18 months. Republican Senator Tom Coburn said he is willing to compromise on tax increases but he said that a short-term debt extension is the only choice President Barack Obama has at this time.

Congressional leaders will continue with their negotiations. The Republicans want a two-step plan where the debt limit will be increased and deficits will be cut. The first step will provide the government with enough borrowing authority to get through the rest of the year while the legislators are working on additional decrease on budget deficit.