1 What's the timetable? Vice President Joe Biden, Obama administration officials and six key members of Congress plan to hold three-hour meetings over as many as four days this week in an effort to reach some agreement on a budget deficit-cutting proposal by July 1, a plan that most lawmakers insist be part of any agreement to raise the nation's debt ceiling.
2 What will talks focus on? They are expected to center on three big pieces of a potential agreement: Taxes, government health programs and spending limits.
3 What are the prospects on taxes? Republicans are opposed to raising taxes. Democrats say they will never be able to sell a compromise to their colleagues without some new revenue. They say the most affluent Americans should contribute to the debt limit deal through new taxes on hedge fund operators or by phasing out tax deductions for those at the highest levels of earnings.
Also in the mix: The Obama administration's suggestion that this year's 2 percentage point cut in Social Security payroll taxes, due to expire at the end of the year, be extended. Should that cut be included in the package, Republicans can argue that they won lower taxes.
4 What are the prospects on spending cuts? Limits on most domestic discretionary spending, or spending that's directly under lawmakers' control, are a popular topic, but there's no consensus on what to cap or how. Democrats want to exempt things such as education, infrastructure and other programs that either serve as safety nets for lower-income people or create jobs. Republicans are more sympathetic to broader caps, and they want any increase in the debt limit to be the same figure as the spending cuts, meaning about $2 trillion over 10 years.
5 What are the prospects on health care? Republicans have argued that it's time to restructure Medicare, the government's health care program for the elderly and some people with disabilities, and Medicaid, the joint federal-state program that serves lower-income people. Democrats reject any major overhaul and have so far pushed for modest changes like allowing the government to negotiate prescription prices with drug companies and to require drug industry rebates for people eligible for both Medicare and Medicaid.
6Where does the deficit stand? The budget deficit in fiscal 2012 is expected to reach $1.5 trillion, and over the next 10 years, the government is expected to accumulate about $7 trillion in deficits.
7 What happens if no deal isn't reached? If the debt limit of $14.3 trillion isn't raised by Aug. 2, the government is expected to run out of borrowing authority -- which the Obama administration has warned could trigger financial chaos.
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