US legislature eyes deficit cap - KWWL - Eastern Iowa Breaking News, Weather, Closings

US legislature eyes deficit cap


The leader of the Democratic-controlled Senate says any legislation increasing the government's ability to borrow more money to meet its obligations should contain a cap on how big the deficit can be in any given year.

Majority Leader Harry Reid said the mechanism would involve a new law binding Congress to reduce the deficit.  Reid didn't give further details, but several proposals on Capitol Hill would require automatic spending cuts or tax increases if Congress can't meet spending or deficit targets.

Raising the so-called debt ceiling is by far the most pressing question facing Congress and President Barack Obama.  The measure is required to avoid a first-ever default on U.S. obligations that would rattle financial markets.  Republicans and Democrats both want spending cuts added to the measure.

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