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Lawmakers will have no holiday from the debt limit

WASHINGTON — The Senate canceled its Fourth of July recess on Thursday, but partisan divisions remained razor sharp as the clock ticked on efforts to strike a deal to avoid a government default and trim huge federal deficits.

A day after President Barack Obama accused congressional leaders of procrastinating over the impasse, Senate Majority Leader Harry Reid, D-Nev., announced that the chamber would meet beginning next Tuesday. The Republican-run House is not in session this week but had already been scheduled to be at work next week.

Despite the Senate's schedule change, there was no indication the two sides had progressed in resolving their chief disagreement. Democrats insist that a deficit-cutting package of deep spending cuts include higher taxes for the wealthiest Americans and fewer tax breaks for oil companies. Republicans say any such agreement would be defeated in Congress, a point Senate Minority Leader Mitch McConnell, R-Ky., made anew when he invited Obama to meet with GOP lawmakers at the Capitol on Thursday afternoon.

The Obama administration has warned that if the government's $14.3 trillion borrowing limit is not raised by Aug. 2, the U.S. will face its first default ever, potentially throwing world financial markets into turmoil and threatening the economic recovery.

Many congressional Republicans indicate they're unconvinced that such scenarios would occur.

But on Thursday, in an interview with Bloomberg Television, a Standard & Poor's executive said the agency will give the U.S. government its lowest credit rating if the United States defaults.

HE SAID WHAT ABOUT OBAMA? MSNBC suspended political analyst Mark Halperin indefinitely for an off-color remark about President Obama on Morning Joe Thursday. Halperin, a Time editor, apologized on the air and in a statement. White House spokesman Jay Carney, a former Time Washington bureau chief, said Halperin's comment was an inappropriate for any president, and that he had expressed this sentiment to network executives.

Geithner staying for 'foreseeable future'

Treasury Secretary Timothy Geithner said late Thursday he'll stay put at the Treasury Department for the "foreseeable future," addressing speculation he might leave the Obama administration following the current round of budget negotiations. "I live for this work. ... I'm going to be doing it for the foreseeable future," Geithner said when questioned about his plans by former President Bill Clinton on stage at a meeting of the Clinton Global Initiative.

Lawmakers will have no holiday from the debt limit 06/30/11 [Last modified: Friday, July 1, 2011 12:02am]

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