Added to the political question of whether either one of the competing debt-limit plans can pass Congress is a practical question from the nonpartisan CBO: How much will they cut the deficit?
The proposal by the 'Gang of Six' senators Tuesday draws on ideas from the deficit commission. The middle-of-the-road plan will have to overcome partisan concerns and a lack of time.
Debt ceiling talks could result in a $4 trillion 'grand bargain,' or a smaller $2 trillion deal. Most economist say the bigger deal would be more helpful – and send a positive message to markets.
Ben Bernanke, head of the Federal Reserve, suggested Wednesday that lawmakers should instead focus on cutting the deficit over the medium to long term, in light of the slow recovery.
Fed chief Bernanke avoids taking a position on taxes while telling Congress it must act 'in a timely manner' to reduce the deficit. Failing to raise the debt limit, he says, would be a costly mistake.
The Dow gained about 123 points, and the Nasdaq gained about 39 points, led by gains in energy
One of the few potential points of bipartisan compromise in the budget stalemate is reining in tax breaks. A Senate vote Tuesday could reveal whether GOP senators are on board.
Republicans and Democrats seem to be talking past each other on Social Security. Republicans are unwilling to consider tax increases, and Democrats don't want to cut benefits.
Vice President Joe Biden hosted a meeting with lawmakers from both parties Thursday on curbing deficits. Although some options are controversial, there's still room for agreement on other parts of the federal budget.