U.S. Debt Talks Stalled as Greek Crisis Looms

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There were still no signs of a deal to increase America's $14.3 trillion debt ceiling Friday, following another round of bipartisan negotiations.    

Vice President Joe Biden said Thursday that they hope to present a draft agreement to congressional leadership by the Fourth of July recess, but such a deal seems unlikely since both sides are still at a standoff.

Democrats have refused to agree to any cuts to Medicare or Social Security benefits.  

"We're for protecting seniors' Medicare. That's our top priority," Senate Majority Leader Harry Reid, D-Nev., said.

"But it seems that the Republicans' top priority is making sure they take care of the subsidies for the oil companies. Medicare is not a top priority for them," Reid charged.
Republicans, on the other hand, will not agree to any tax increases.

"I would be surprised, frankly, if we get into the tax issue in this -- in the Biden discussions leading to a vote on the debt ceiling," Senate Minority Leader Mitch McConnell, R-Ky., said.

The Specter of Greece
Meanwhile, Wall Street is keeping one eye on Washington and the other on Greece, where Prime Minister George Papandreou replaced his finance minister in hopes of keeping his country from a disastrous default.
"This is not just a European crisis. It is impossible now to have a financial crisis contained to one corner of the world.  It affects Europe; it's going to affect the United States as well," economist Kash Mansori warned.
The impact of Greece's financial crisis on the U.S. was felt this week when the market dropped on fears Greece is on the verge of bankruptcy.

It affects ordinary Americans, too, because many of their 401k's include European stocks.
American companies that export to Europe are also concerned because if Europeans suddenly have less money to spend, it could bring the slow moving jobs recovery in the U.S. to a halt.

"Our products go to events that happen now globally," American business owner Arnon Rosan explained.

"It's not just about the U.S. anymore -- it's about an interconnected world and interconnected economy," Rosen said.     

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CBN News
Efrem Graham

Efrem Graham

News Anchor & Reporter

Efrem Graham is an award-winning journalist, who comes to CBN News from the ABC owned and operated station in Toledo, Ohio.  He received his master's degree from the Columbia University Journalism School. He also holds a bachelor's degree in English Literature from the Richard Stockton College of New Jersey.  Follow Efrem on Twitter @EfremGraham and "like" him at Facebook.com/EfremGrahamCBN.