Senate’s Majority and Minority leaders proposed a plan that would give President Barack Obama the capability to raise the debt ceiling without the need for congressional approval. This is the best solution to prevent a federal default from happening.
Debt Limit

The plan was drafted jointly by Senate Majority Leader Harry Reid of Nevada and Senate Minority Leader Mitch McConnell of Kentucky. It would bring around $1.5 trillion in deficit reduction for the next ten years. This is smaller than what President Obama or the Republican leaders are aiming for.

The White House said it prefers a more comprehensive deal with regards to the deficit but added that the deal would be accepted by President Obama. The Conservatives in the House are opposing the said deal.

Efforts for a larger deficit reduction deal are still going nowhere. McConnell proposed the measure earlier this week as a way to end the deadlock and avoid the political and economic disaster from happening.

House Speaker John Boehner of Ohio said that the last minute effort could be palatable in the time being. The plan came after Treasury Secretary Timothy Geithner warned that time is wasted on debates as the deadline nears. He added that Congress and White House should approve the debt limit increase before the government runs out of funds on August 2.