Developments in US debt talks

WASHINGTON: Here is what's happening on Friday in negotiations to raise the US government's $14.3 trillion debt limit by Aug. 2 and avoid a credit default:

President Barack Obama tells a town hall meeting at the University of Maryland that every American will suffer if Congress fails to raise the debt limit.

He says both Democrats and Republicans share the blame for the debt and "both parties have a responsibility to solve it."

The Democratic-led US Senate rejects the "cut, cap and balance" plan passed by the Republican-led House of Representatives. It would have cut spending by $5.8 trillion over 10 years.

Democrats said it would have required steep cuts for Social Security, Medicare and Medicaid.

US House Speaker John Boehner dismisses reports of a possible deal with Obama.

"There was no agreement, publicly privately, never an agreement and frankly not close to an agreement," he tells reporters following a closed-door meeting with House Republicans.

Senior Democrats express frustration at being left out of closed-door negotiations between Obama and Boehner.

Democrats worry the deal will include big spending cuts and leave revenues to be worked out later. Senate Democratic Leader Harry Reid urged Obama to be "very careful" because "any arrangement must be fair to all America, not just the wealthy."

The Senate will not take up a backup plan to raise the debt ceiling as it will wait to see what emerges from talks between Obama and Boehner, Reid said.

Copyright Reuters, 2011