The details of the latest debt ceiling plans

U.S. Senate Minority Leader Sen. Mitch McConnell (R-KY) (L) speaks as Sen. John Barrasso (R-WY) (R) listens during a news conference July 12, 2011 on Capitol Hill in Washington, D.C.

Kai Ryssdal: So this happened: On the drive into work this morning, I was flipping the radio dial around, landed on a story about the debt ceiling negotiations and got completely lost. From what they were saying, I had no idea what was happening, what's going to happen, what could be happening to the full faith and credit of the United States come August the 2nd -- if in fact that is the actual date of the financial apocalypse.

So with the understanding that this'll be a different story tomorrow, we've gotten Marketplace's David Gura on the line from Washington to explain where things stand right now. Hey David.

David Gura: Hey Kai.

Ryssdal: So as much as you can, given the way this story is changing, what's the thinking right now in the debt debate?

Gura: I wish I knew. I think everyone is sort of wondering what everybody else is thinking. So you've got Democrats wondering what kind of deal the Republicans are going to go for. And then you've got a lot of division in the Republican party -- you've got Senate Republicans wondering what their colleagues in the House are going to go for. So all in all, just a ton of confusion here. But it does seem like both sides are interested in or are interested in investing in some sort of compromise package. And the one that's sort of leading the pack right now is the one that Senate Minority Leader Mitch McConnell put forward last week. Since then, he and Senate Majority Leader Harry Reid have been working on it, and it may be the best hope to get something done before Aug. 2nd.

Ryssdal: OK, so details please, in understandable English, if you will.

Gura: You got it. So the debt ceiling would go up; President Obama would get the power to do that in three stages, and every time that'd happened, there'd be a Senate vote, something along the lines of 'be it resolved, we disapprove of the president doing this.' And that would allow his opponents to make their opposition known, and in exchange for that, the GOP would get $1.5 trillion in cuts; there'd be no new taxes; and there'd be a commission that would look at ways to save money down the line. But the thing is, Congress can't take up this compromise right away.

Ryssdal: Because?

Gura: Well, a big part of the House GOP doesn't like it. They're pushing for something called "cut, cap and balance." They're saying you can raise the debt ceiling by about $2.4 trillion if you cut the deficit, tie how much the U.S. government can spend to our gross domestic product -- our GDP -- and have a constitutional amendment that would mandate a balanced budget. Now look, the House may pass this -- they've got a Republican majority -- there's no way the Senate's going to pass this. The White House just re-named this thing: "Dodge, duck and dismantle." Someone's having fun with alliteration.

I mean, here's the thing: neither house can debate the McConnell-Reid compromise until this plan, which includes the constitutional amendment, goes through Congress.

Ryssdal: The president met last night, though, with John Boehner and Eric Cantor, the majority leader in the House of Representatives. Is there any kind of real progress being made?

Gura: That's right, they met right after the Women's World Cup game. The president was hoping for $4 trillion in savings over the next 10 years -- that would come from spending cuts and higher taxes the White House said would be shouldered by wealthier Americans and corporations. The White House is still pushing for this; I don't think the odds are that great. After that meeting last night, both sides said the purpose of that meeting was to just sort of keep lines of communication open. Kai, you've probably noticed there are a lot of plans here and not a whole lot of time left.

Ryssdal: Talk to me about that really quickly for a second: what's the actual date by which Washington has to have some kind of plan on the table?

Gura: Right, Aug. 2nd is the date the Treasury Department says is when they can no longer meet their obligations. But bureaucracy is a slow moving animal, and this legislation, some compromise is going to have to start making its way through Congress pretty soon. Some say as soon as later this week.

Ryssdal: Is that literally just so they can write the bill and get it signed and proofchecked and all that stuff?

Gura: That's right. It's entirely procedural.

Ryssdal: David Gura in Washington for us. Thanks David.

Gura: Thank you.

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