Agreement to raise the US debt ceiling sketched out

The US President Barack Obama and the US Congress tried again to arrive at an agreement about raising the US debt ceiling. An estimated framework emerged two days before the deadline.

The White House with leaders of the Republican party worked out a draft of an agreement to raise the country’s $14,3 trillion debt limit that would allow larger loans for the government.

The framework outlines immediate cuts up to $1 trillion and includes creation of the committee in charge of additional savings later this year.

Despite the emerging of the framework, there is no final agreement and the negotiations are still in progress.

Both Democrats and Republicans, moving towards compromise and cooperation, hope that the deal will be completed before Aug. 2 – the default deadline set by the US Department of Treasury.

The Treasury Department estimates that the government borrowing ability will be exhausted by the end of Tuesday and it will be forced to pay its bills from cash. Independent analysts calculate that there is enough money for the government to pay its bills for about a week.

Barack Obama has continually called for an increase of the borrowing limit in order to prove the government’s ability to repay its obligations. A default on some of its obligations could lead to a global financial crisis.