Posted: Jul 18, 2011 1:22 PM
Source: Associated Press
WASHINGTON - The Obama administration says President Barack Obama would veto the "cut, cap and balance" plan proposed by tea party-backed House Republicans if it lands on his desk.
In a statement, the Office of Management and Budget says that setting arbitrary spending levels and a balanced budget amendment are not necessary in order to achieve financial stability.
The so-called "cut, cap and balance" plan is favored by some Republican freshmen in the House.
It would allow the government to borrow an additional $2.4 trillion, but only after big and immediate spending cuts and adoption by Congress of a constitutional amendment requiring a balanced federal budget.
The plan is sure to stall in the Senate, where majority Democrats say it would lead to decimating budget cuts.
Meanwhile, ratings agency Moody's says if the U.S. gets rid of the legal limit on its debt, it could eliminate the threat to its credit rating.
And the leader of the Senate says the chamber will meet every day - including weekends - until Congress sends President Barack Obama legislation to make sure the government doesn't default on its obligations.
Nevada Democrat Harry Reid said there's no more important task than ensuring the U.S. pays its obligations, including Social Security checks.