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Timeline: The debt debate

Jul 11, 2011, 10:12 p.m.

(Reuters) - President Barack Obama and top lawmakers will meet again on Monday in search of a deal on slashing the budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.

Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.

Republican and Democratic lawmakers say any increase must include measures to ensure the country's debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.

Following is a timeline of the debate:

November 2, 2010 - Republicans win control of the House of Representatives on a promise to scale back government spending and tackle budget deficits that have hovered at their highest levels relative to the economy since World War Two.

December 1, 2010 - After nine months of talks, a bipartisan deficit reduction panel commissioned by Obama releases a report that advocates $3 trillion in spending cuts and $1 trillion in revenue increases -- mainly by closing loopholes in the tax code -- over 10 years.

January 2011 - Six Republican and Democratic senators, known as the "Gang of Six," take matters into their own hands as they begin meeting to try to strike a long-term deficit-reduction deal they can present to their parties.

February 19 - The House passes a budget for the current fiscal year that ends September 30 that would cut $61 billion from last year's levels. The Democratic-controlled Senate defeats it one month later.

April 9 - Obama and congressional leaders bring the government to the brink of a shutdown before they agree on a budget for the current fiscal year that cuts $38 billion from last year's levels. Billed as the largest domestic spending cut in U.S. history, it actually causes the government to spend $3.2 billion more in the short term.

April 13 - After Obama's initial proposal is criticized as inadequate, the president lays out a new deficit-reduction plan that would save $4 trillion over 12 years, in part by accelerating health reforms. He also proposes that Vice President Joe Biden lead bipartisan deficit-reduction talks.

April 15 - The House passes a budget that would cut spending by $6 trillion over 10 years, in part by scaling back healthcare for the elderly and the poor.

May 5 - As Biden and negotiators from both parties hold their first meeting, top Republicans say there will likely be no broad agreement on the main sticking points like tax reform and healthcare.

May 9 - House Speaker John Boehner, the top Republican in Congress, says any increase in the debt ceiling must be matched by an equal amount of spending cuts. The Treasury Department estimates it needs at least $2 trillion to cover borrowing through the November 2012 elections.

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