“Cliffhanger” Interactive: A Guide to the Gridlock


Peppered with obscure economic terms, heated personality clashes and a host of complicated economic proposals, the bitter two-year brawl over the nation's debt and deficit problems can be hard to follow.

Our interactive "Guide to the Gridlock" breaks down the dramatic saga and lets you track how it all broke down at every turn.

Debt Ceiling When the U.S. government approaches the maximum amount of money it can borrow, a limit known as the "debt ceiling," it must either raise the ceiling or risk defaulting on its debts. Concerned over the country's rising debt and energized by a new crop of revolutionary Congressional freshmen, the Republicans decided to use a forthcoming vote to raise the debt ceiling in August 2011 as leverage to finally force Washington to deal with what they see as a spending problem.
Domenici-Rivlin Task Force An early bipartisan proposal to address Washington's rising debt and deficit problems came from former Senate Budget Committee chairman Pete Domenici and former White House Budget Director Alice Rivlin. Released in November 2010, their deficit plan combined spending cuts and tax increases, promising to reduce the deficit by almost $6 trillion over the next nine years. Controversial proposals included a 6.5 percent national sales tax, an overhaul of Medicare in 2018, and cutting benefits and raising taxes for Social Security. Though the plan didn't generate consensus, some of its policies factored in later negotiations.
Simpson-Bowles Commission This bipartisan commission was created by the president in 2010 to find a long-term plan to deal with the nation's rising deficit. Its high-profile report (PDF), released in December 2010, included revenue increases, called for social security reforms and an overhaul of the tax code, and promised to reduce the deficit by $3.8 trillion over the next decade. Proposed spending cuts (PDF) included reducing defense outlays, the size of the federal workforce and other discretionary spending. Citing its failure to deal with health care spending, Rep. Paul Ryan and two other House Republicans on the commission voted against it. The White House didn't publicly embrace the plan, and the report ultimately failed to get the 14 votes necessary to be sent to Congress for approval.
The Path to Prosperity The brainchild of the Republican Party’s numbers wunderkind Rep. Paul Ryan of Wisconsin and introduced in April 2011, the plan promised to reduce the federal deficit by $6.2 trillion over the next decade by cutting spending, lowering taxes, repealing President Obama's healthcare plan and partially privatizing Medicare. The plan was especially unpopular among the elderly. Though the budget passed in the Republican-controlled House of Representatives, it failed in the Democrat-led Senate. President Obama railed against the plan in an April 2011 speech with Ryan in the audience, angering Republicans.
Biden Debt Group Vice President Joe Biden led a bipartisan debt working group that included House majority leader Eric Cantor and other ranking Republicans and Democrats from the House and Senate. They had met nearly a dozen times and made progress in identifying spending cuts, when Cantor learned from the vice president that House Speaker Joe Boehner had been having secret negotiations with the president at the White House. After disagreements over tax increases in late June, Cantor's talks with Biden broke down, and the House majority leader told The Wall Street Journal that it was up to the president to cut a deal with Boehner.
The Grand Bargain Following a well-publicized round of golf in June 2011, President Obama and House Speaker John Boehner agreed to negotiate a "grand bargain" that would address the debt ceiling, long-lasting tax reform and entitlement cuts. The two met in secret, holding what Boehner called "Nicorette and merlot sessions" at the White House, until Eric Cantor found out. On July 9, Boehner pulled out of the talks, only to return in mid-July with Cantor in tow. The two sides were close to reaching a deal in July 2011, just as the so-called "Gang of Six announced their plan, which included a revenue increase of $1.2 trillion, $400 billion more than the deal the White House and Boehner were close to reaching. The president then asked Speaker Boehner for $400 billion more in revenue, and any potential deal fell apart.
The Gang of Six A bipartisan group of six senators began meeting in January 2011 to make a deficit deal they believed both parties could embrace. Over several months, Democrats Mark Warner, Richard Durbin and Kent Conrad and Republicans Saxby Chambliss, Tom Coburn and Mike Crapo negotiated a compromise that would cut $4.6 trillion from the budget and include a revenue increase of $1.2 trillion, $400 billion more than the "Grand Bargain" negotiated by the White House and Speaker Boehner. Though the "Gang of Six" plan stood little chance of passing in time for the 2011 debt ceiling deadline, it threw a curveball in the "Grand Bargain" negotiations between President Obama and House speaker John Boehner.
The Fiscal Cliff As the August 2011 debt ceiling deadline neared, Senate Minority Leader Mitch McConnell reached his own compromise with Vice President Biden that raised the $14.3 trillion debt ceiling until the end of 2012, when deep automatic spending cuts would go into effect. Unless Washington came up with a plan to reduce the deficit by that time, the U.S. would go over the so-called "fiscal cliff," taxes would go up on almost everyone and the fragile economy would dive deeper into recession. But when President Obama retained the White House and the Republicans maintained their majority in the House in the 2012 elections, much of the gridlock remained.
Plan B The day after President Obama won re-election, Speaker Boehner publicly committed Republicans to a deal that would include revenue increases. But when negotiations didn't pick up steam, Speaker Boehner moved onto the next option, which he dubbed "Plan B," an arduously crafted strategy for getting the House to take the lead in solving the crisis. But Boehner struggled to get his party in line behind the plan, which included raising taxes on millionaires. Just days before the "fiscal cliff" deadline, Boehner realized he didn't have the votes he needed from his own party.
Sequestration In the last hours before the fiscal cliff deadline, Sen. Mitch McConnell and Vice President Biden reached another deal to avert disaster. The compromise put higher taxes on the wealthiest Americans and enacted spending cuts. Though Boehner and Rep. Paul Ryan voted for the deal, most House Republicans opposed it, arguing that it failed to enact significant cuts in healthcare or other social programs. The bill also kicked $1.2 trillion worth of mandatory, across-the-board spending cuts to account for budget shortfall, known as "sequester cuts," two months down the road. Today, in addition to these automatic cuts, the country now faces a growing federal deficit, a battle to keep the federal government operating and yet another deadline for raising the debt ceiling.
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