Senate to Work on Debt Through Vacation

WASHINGTON - JUNE 30: Sen. Harry Reid said during a news conference June 30, 2011 that the July 4th recess will be cancelled for dealing with the debt ceiling talks. (Alex Wong/Getty Images)

WASHINGTON—The Senate will remain in session through holiday week to resolve the debt limit impasse. Senate Majority Leader Harry Reid made the announcement Thursday morning.

“What we have to do is too important not to be here and try to resolve what needs to be done. We really don’t have any time to waste. We know the most important issue facing the country today is reaching an agreement that cuts our deficit,” said Reid in a Senate Democrats press conference on debt limit negotiations following the morning announcement.

Reid urged Republicans to place the future of the national and global economies above special interests and large donors.

“A default crisis would do nothing to get our fiscal house in order. Instead, default would derail our fragile economic recovery and plunge this nation—and the world—back into not just a recession, but a full blown depression,” he said on the Senate floor.

In a June 29 press conference, President Barack Obama mentioned an Aug. 2 “hard deadline.” According to the president the government will simply “run out of tools” to resolve the issue by that time.

“If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant and unpredictable. And that is not a good thing,” the president said.

Republicans argue that Democrats are doing the opposite of what is needed to alleviate the fiscal crisis.

“Senate Democrats have failed to lead on this critical issue. It’s been 791 days since they’ve passed a budget, and now they are calling for tax hikes instead of spending cuts to address our nation’s budget crisis. Meanwhile, our federal debt has skyrocketed by $3.2 trillion and Washington is borrowing 40 cents of every dollar that it spends,” Sen. Roy Blunt said in a press release.

Both Obama and Reid dismiss the idea that the deficit can be trimmed without raising taxes for the rich.

“If we choose to keep those tax breaks for millionaires and billionaires, if we choose to keep a tax break for corporate jet owners, if we choose to keep tax breaks for oil and gas companies that are making hundreds of billions of dollars, then that means we’ve got to cut some kids off from getting a college scholarship. That means we’ve got to stop funding certain grants for medical research. That means that food safety may be compromised. That means that Medicare has to bear a greater part of the burden. Those are the choices we have to make,” Obama said.