Debt Ceiling Looms Over Congress

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Congress is scrambling for a deal Sunday for raising the debt ceiling. Economists warn that if no deal is struck, the U.S. economy could be hit hard. NPR's Andrea Seabrook talks with host Guy Raz from the Capitol.

GUY RAZ, host: From NPR News, this is WEEKENDS on ALL THINGS CONSIDERED. I'm Guy Raz.

Lawmakers on Capitol Hill say they failed to come to an agreement that would raise the debt limit. Now, unless it's resolved soon, the U.S., for the first time in its history, could default on its loans.

This morning, Treasury Secretary Timothy Geithner told ABC News that at this point, there's no margin for error.

(SOUNDBITE OF TV SHOW, "THIS WEEK WITH CHRISTIANE AMANPOUR")

Secretary TIMOTHY GEITHNER: This is a critical test for the American political system. It's a critical test for Congress and for the Republican leaders in Congress, because the eyes of the world are on us.

RAZ: Republicans have said they'll only raise the debt limit if the government promises to slash spending. On Friday, Republican House Speaker John Boehner backed out of deficit reduction talks with President Obama. We'll have updates from our correspondents at the White House and the Capitol. We begin with NPR's Andrea Seabrook on Capitol Hill.

Andrea, I understand that there are two congressional plans taking shape at the moment. Let's start with Speaker Boehner's plan. What do you know about it?

ANDREA SEABROOK: Well, I do have some excerpts from a conference call that Speaker Boehner had with his Republican members in the House of Representatives. He talked about a plan that he is trying to bring together that follows the principles of cut, cap and balance. Now, remember, cut, cap and balance is what Republicans called their plan that passed, week before last - it failed in the Senate last week. It has no chance of coming up in the Senate at this point.

Republica-- So Speaker Boehner actually said that to his own members. He said, you know, that failed in the Senate. You know that. Americans know it. He appeared to be sort of coaxing conservative Republicans, those with a connection to the Tea Party, out of their staunch hard-right positions toward a compromise.

We don't know exactly what the deal - what the specifics of that plan would be right now. We do know it would be some kind of two-step process with many, many deep trillions of cuts in social programs at this point.

RAZ: What about the Democrats, Andrea? What do we know about their plans?

SEABROOK: We know that speaker - that majority leader in the Senate, Harry Reid, is putting together a plan that would cut just as - enough, about $2.4 trillion, to be able to raise the debt ceiling - and remember, those two numbers have to be paired to get through the House - to raise the debt ceiling enough to get us through 2012, through the elections at the end of that year.

And so what's interesting about this is, remember, last week, early in the week, we had this sort of - there was the biggest day on Wall Street for the Dow in a long time, this sort of excitement over the possibility of a grand bargain, a big deal. It fell apart Friday, and we seem to have nothing. After two days of whispers and negotiations and burnt-up phone lines here in Washington, it appears that we now have two possible plans, one from each party. And each house - each chamber of Congress is trying to pass its own plan and dare the other chamber not to pass it as we come ever closer to this deadline.

RAZ: That's NPR's Andrea Seabrook on Capitol Hill. Andrea, thanks so much.

SEABROOK: My pleasure.

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