WASHINGTON (AP) - Republicans say these warnings are just "scare tactics." But Senate Democratic leader Harry Reid is the latest to warn of a possible cutoff of Social Security payments if there is no deal to raise the government's borrowing limit by early August. He's echoing a warning that came from President Barack Obama.
Another round of negotiations is set for later today at the White House.
Yesterday, House Majority Leader Eric Cantor urged Obama to accept a short increase in debt rather than a longer one. According to people who were there, Obama then declared "enough is enough."
Reid says Cantor should not be part of the debt limit negotiations. He's calling the Virginia Republican congressman "childish."
Meanwhile, Federal Reserve Chairman Ben Bernanke says lawmakers would end up increasing the federal deficit if they fail to raise the nation's borrowing limit in time to avoid a default. Bernanke says a failure to boost the borrowing limit would amount to a "self-inflicted" wound. That's because it would drive up interest costs on the $14.3 trillion debt and reduce government revenues by slowing economic growth.