U.S. lawmakers are preparing to vote on a bill to slash the country's spending and raise the debt limit, although this version of the legislation has little chance of resolving a high-stakes political standoff.
Tuesday's vote in the Republican-led U.S. House of Representatives would cut more than $100 billion from the federal budget next year in exchange for raising the country's borrowing limit.
The so-called Cut, Cap and Balance Act would also impose strict limits on future spending, and calls for amending the U.S. Constitution to ban the government from spending more money than it takes in.
Lawmakers and the president have until August 2 – two weeks – to resolve their differences. If they fail, the U.S. may start defaulting on some of its financial obligations.
Top U.S. officials and some economists have warned a default would have catastrophic consequences, possibly throwing the United States back into recession.
But despite backing from the Republican Party's Tea Party faction and other fiscally conservative groups, the Cut, Cap and Balance Act is likely to meet with stiff resistance in the Democrat-controlled Senate. And the White House has said President Barack Obama would veto the bill if it got through.
Administration officials say the bill would severely harm the government's ability to help middle-class Americans and the elderly.
Meanwhile, Democratic Senate Majority Leader Harry Reid continues to hold talks with Republican Senate Minority Leader Mitch McConnell on McConnell's proposal to give the president sole authority to raise the debt limit by $2.5 trillion in three installments over the next year.
McConnell unveiled the plan last week as talks between Mr. Obama and Republican lawmakers over the debt limit and the nation's deficit reached a stalemate. Democrats are also offering to include over $1 trillion in spending cuts as part of the plan, and establish a joint House-Senate panel to recommend further spending cuts.
Congress must raise the $14.3 trillion borrowing limit by August 2 so the government can meet its financial obligations. The president held talks with congressional leaders last week in hopes of reaching agreement on a plan that would cut trillions of dollars from the budget, but Republicans have refused to accept Mr. Obama's insistence that such cuts be accompanied by revenue increases.
Republican House Speaker John Boehner says Mr. Obama is unwilling to cut spending, calling on the president to show more courage.
