The Republican-led U.S. House of Representatives votes Tuesday on legislation that would cut billions of dollars from the federal budget in exchange for raising the country's borrowing limit and avoiding a first-ever default. The so-called Cut, Cap and Balance Act, supported by the Republican Party's Tea Party faction and other fiscally conservative groups, would also impose strict limits on future government spending, and require both the House and Senate to approve a constitutional amendment requiring a balanced budget, outlawing the government from spending more money than it takes in.
The bill has little chance of being approved by the Democratic-controlled Senate, and the White House says President Barack Obama would veto it. The administration says the bill would severely harm the government's ability to help middle-class Americans and the elderly.Meanwhile, Democratic Senate Majority Leader Harry Reid continues to hold talks with Republican Senate Minority Leader Mitch McConnell on McConnell's proposal to give the president sole authority to raise the debt limit by $2.5 trillion in three installments over the next year.