L/SFR Sneak Peek: Debt Limit and Budget Talks Continue as Groups Highlight Risks

May 31, 2011 | By Liza Casabona | Post a Comment

(This story is excerpted from the June 6 Local/State Funding Report.) Spending and deficit reduction talks continued throughout May, with Congress taking a series of symbolic votes on budget proposals that have already been dismissed as dead on arrival.

Vice President Joe Biden and a bipartisan group of lawmakers have reportedly agreed on the broad strokes of an agreement to raise the federal debt limit, but they continue to hash out the specifics. In the broadest terms, as of press time negotiators appeared to agree on cutting a total of $1 trillion from discretionary and mandatory spending.

Republicans have stated that they are staunchly opposed to raising the debt ceiling without a deal that includes significant spending cuts. Democrats have argued that bogging the negotiations over the nation’s debt limit down in budget talks is irresponsible. They have conceded the need for spending cuts to get the nation’s debt under control in the longterm, but have argued that increased revenue, largely from higher taxes on targeted groups, must also be a part of the equation.

The U.S. reached its statutory debt limit in mid-May but Treasury Secretary Tim Geithner has instituted measures that postpone potential defaults until late summer.

Comments and opinions about a host of options for debt reduction, spending levels and the debt-limit debate have swirled in Washington, D.C. since negotiations began.

For more about the ongoing negotiations over the debt limit and budget, subscribers can look to the June 6 issue of Local/State Funding Report.)

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