Almost everyone involved in the debt ceiling negotiations in Washington, DC has struggled with debt ceiling negotiations. When reading through the different debt ceiling and budget proposals that have already been rejected, it’s easy to get a headache and hard to determine what the end result of any deal will actually be. 

Speaker Boehner’s plan to temporarily raise the debt ceiling was the last to be rejected by all three Democratic leaders in Washington, DC, primarily because Speaker Beohner’s plan is a temporary solution that will lead to further budget crisis’ down the road in the not too distant future. Speaker Boehner’s plan is a two-step plan. As reported by Reuters:

He “is going ahead with a two-stage program to achieve some spending cuts and a stopgap debt limit increase with plans to do another installment of both next year. He'd start with about a $1 trillion debt limit hike by Aug. 2, with a similar or greater amount of spending cuts.”

The Democrats are instead planning on unveiling a proposal today which will include the Republican’s objectives: spending cuts and no taxes. President Obama has warned both sides of the aisle that he will veto any kind of short-term extension. 

According to the Washington Post, Rep. Reid’s new plan did not meet with approval from President Obama when the representative first showed the plan to the President. 

The accounting used in the negotiations is not all that simple. Because I am a non-accountant, I’m not always sure how the money gets counted or why certain parts of the Treasury’s cash gets separated out from the rest of the money. Here’s the part about the budget negotiations and Reid’s plan which confuses me. From the Washington Post: 

“Counting money not spent on wars that the nation is already planning to end is widely viewed as a budget gimmick, and House GOP leaders have been reluctant to include it as savings. But it has a political advantage because it was included in the budget blueprint House Republicans adopted this spring. And Democratic sources said the option may look more attractive as the clock ticks down to Aug. 2, when Treasury officials say they will run out of money to pay all of the government’s bills.”

The debt ceiling negotiations are certainly complicated by the upcoming election. The Republican’s temporary solution may just be a way to delay the debt ceiling crisis until just right before the elections and President Obama’s stances on the debt ceiling negotiations certainly involve some posturing as well. 

Reuters lays out several alternative solutions for the debt ceiling, with the last being President Obama invoking the constitution. While it seems unlikely that President Obama will take advantage of this option, it remains on the table in the event that no solution is reached.