WASHINGTON — The White House believes it must strike a budget deal with Congress by July 22 to avoid a risk of defaulting on the national debt , Democratic officials briefed on the negotiations said Thursday, as Senate leaders canceled a recess next week to try to break the deadlock with Republicans. "If we didn't pay our bills, it would plunge the United States not into a recession, not into the so-called double-dip recession, but into a full-blown depression," Senate Majority Leader Harry Reid (D., Nev.) said Thursday. That is the day when, officials say, the government will reach its debt ceiling and no longer be able to borrow what it needs to keep operating and repay existing debt.
– The date for what may or may not be financial doomsday is now July 22. Both the Wall Street Journal and the New York Times say the White House has figured that to be the do-or-die day to hammer out a deal with Republicans to avoid an unprecedented default on the national debt. The government has enough funds to keep operating under the debt ceiling until August 2, but it will take time to get legislation through the House and Senate before then to raise the borrowing limit. Hence the July 22 deadline. Democrats say the stakes are enormous: "If we didn't pay our bills, it would plunge the United States not into a recession, not into the so-called double-dip recession, but into a full-blown depression," maintains Harry Reid, who canceled the Senate's July 4 recess. Republicans say those claims are exaggerated: Fears of a "catastrophic collapse of the markets" are "ridiculous," says Sen. Pat Toomey.