GOP, Democrats Remain Far Apart On Debt Ceiling Talks

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Top lawmakers resume negotiations Wednesday on raising the amount of money the nation can borrow.

The meeting comes a day after the head of the Federal Reserve warned that there would be major problems if tough decisions weren't made now.

"I fully understand the desire to use the debt limit deadline to force some necessary and difficult fiscal policy adjustments, but the debt ceiling is the wrong tool for that important job," Federal Reserve Chairman Ben Bernanke said. He has urged Congress not to play games with the debt limit.

Scolding lawmakers in a speech Tuesday, Bernanke said that failure to raise the debt ceiling could have a devastating impact on the economy. The nation hit its $14.3 trillion borrowing limit in May. If an agreement isn't reached by August 2, the government could default on its bills for the first time.

Vice President Joe Biden led the second of three straight days of negotiations with top lawmakers Wednesday, trying to find trillions of dollars in budget savings to cover the increase.

Republicans and Democrats remain far apart as the deadline inches closer. Republicans are advocating $2 trillion in spending cuts--including Medicare, while Democrats say that spending cuts must be accompanied by new revenue in the form of taxes. The GOP wants tax hikes off the table, while Democrats are balking at cuts to Medicare.

"It's time Republicans abandon their ideological plan to change Medicare as we know it, and work with us to strengthen and preserve our promise to seniors," Senate Majority Leader Harry Reid said.

Meanwhile, House Speaker John Boehner had harsh words for the Obama administration, accusing his policies of "killing the economy and killing job creation."

In a scenario ominously similar to the near-government shutdown, neither side appears willing to cave, nor does an agreement appear in the horizon. The government shutdown was averted literally with minutes to spare.

President Obama will get to discuss the debt limit in a more casual setting with Boehner this weekend; the two will hit the green for a game of golf Saturday.