Republicans, Democrats gather on debt negotiation

WASHINGTON: Here is the situation on Wednesday as lawmakers try to close in on a deal for Congress to raise the US government's $14.3 trillion borrowing limit by an Aug. 2 deadline and avoid a debt default:

House of Representatives Speaker John Boehner, the top Republican in the US Congress, is reworking his deficit reduction proposal after some conservatives in his party rejected it and an analysis by the non-partisan Congressional Budget Office found it would save $350 billion less than the $1.2 trillion over 10 years he had claimed.

President Barack Obama has threatened to veto the Boehner plan if Congress passes it and sends it to him, and is said to be working on another compromise in hopes of striking an 11th-hour deal.

The impasse in Washington is unnerving investors. Gold soars to a record high for the sixth time in two weeks and the dollar slumps to a new low against the Swiss franc as investors flee to safety. Stock prices are weak worldwide.

House Republicans and Democrats are meeting separately behind closed doors to discuss the status of debt negotiations.

Senate Democratic Leader Harry Reid and his leadership team hold a press briefing at 11:45 EDT (1545 GMT).

Copyright Reuters, 2011