President Obama and Congress representatives reconvened today to continue talks on cutting $4 trillion from the 10-year budget. The blueprint of the plan will reportedly include at least a $1 trillion tax increase for American citizens.
It has been rumored throughout media sources that Obama wants up to $1.7 trillion of the $4 trillion total to come from new tax revenue. If that is the case it is extremely likely the tax rate for higher income earners will rise, while lower rates in place for middle and low income earners would remain more stable.
During meetings on Sunday, Democrats encountered resistance from Republicans who stated they wanted a smaller deal. A number of Republicans have also reportedly expressed concerns that the Democrat promise to lower tax rates while closing a range of tax breaks was simply not enough.
The Treasury Department has warned that the U.S. may be unable to cover the country's bills if Congress does not raise the $14.3 trillion debt limit by August 2.
A host of commentators have said that a failure to raise the debt limit could push the country back into recession, and that this would have a drastic impact on global markets, as well as threaten the dollar's reserve status.
Many feel that an agreed deal should be in place by July 22 to ensure Congress has time to act.