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No signs of give on US debt standoff

Updated: 2011-07-18 08:45

(Agencies)

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WASHINGTON - Tea Party-backed Republicans will likely dominate the House of Representatives this week, pushing a spending cut plan that stands little chance of passing either legislative chamber even though a potential US default on its debt is just over two weeks away.

With the stalemate continuing and time growing short, House Republicans were gearing up to push even harder on their plan that dramatically cuts spending, rules out any tax increases, and calls for a balanced-budget amendment to the US Constitution that would require the government to not spend more than it takes in. But such a plan is unlikely to be passed by the Democratic-controlled Senate.

That makes the effort primarily an opportunity for House Republicans, particularly dozens of new lawmakers elected with the support of the small government tea party movement, to symbolically show their steadfastness in demanding huge cuts in government spending, opposition to higher taxes and ideological purity in balancing the budget.

Obama has vowed to veto any legislative measure that does not include higher taxes for America's wealthiest citizens and corporations, including the elimination of tax breaks for hugely profitable oil companies. He appears to be gaining ground with voters, especially pivotal independents.

His so-called balanced approach of spending cuts and tax increases has the backing of 69 percent of Americans, according to a recent Gallup poll. And among those who aren't wed to an entrenched party view, pragmatism seems to be gaining traction over ideology.

A poll from the Pew Research Center found that among independent voters _ coveted by both political parties looking ahead to the 2012 presidential and congressional elections _ concern has shifted from fear that raising the debt ceiling would increase government spending to worry about the impact of the failure to raise the debt ceiling,

Two months ago Pew found that independents, by a 49 percent to 34 percent margin, were more concerned that raising the debt ceiling would lead to higher government spending, as opposed to chiefly fearing the harmful effects of keeping the ceiling unchanged. This month, independents split evenly on the question.

If the current $14.3 trillion debt ceiling isn't increased by August 2 _ which past Congresses have done as a matter of course no matter which party was in control _ it will have far-reaching consequences.

Default likely would produce higher interest rates for consumers on mortgages, car loans and credit cards. It also would make US government borrowing more expensive and could stop government checks from going out to elderly Social Security recipients. All that holds the potential for turmoil not only domestically but also in world financial markets and international economies.

Among some voters, there is suspicion that the talks in Washington are infused with the politics of the 2012 election in which the state of the economy will likely determine whether Obama wins a second term.

With no give in sight on either side, White House budget director Jack Lew remained optimistic on Sundsymbolic than real. An amendment requires a two-thirds majority vote in both the House of Representatives and the Senate, and then must be ratified by three-fourths of the 50 states _ a lengthy and difficult process.

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