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Here is what is happening on Monday as lawmakers try to close in on a deal to raise the $14.3 trillion U.S. debt limit by August 2 and avoid a credit default:

* President Barack Obama warns in a televised address to the nation on Monday evening that defaulting on U.S. debt obligations would be "a reckless and irresponsible outcome" to the stalemate in Washington. He calls for a "fair compromise" and says a temporary extension of the debt ceiling would not solve the problem.

* House Speaker John Boehner, the top Republican in the House, follows Obama with a televised response. Boehner agrees the United States cannot default on its debt obligations. But Boehner says he stands by what he told Obama in January: the American people will not accept an increase in the debt limit without significant spending cuts and reforms.

* The Democratic-led Senate and Republican-led House of Representatives plan to consider rival plans to reduce the deficit and raise the debt ceiling. Votes may come as early as Wednesday.

* Obama says in a speech before a Hispanic group that both parties have the responsibility to come together on the issue. He says he is willing to reduce spending, but that alone is not enough to close the deficit gap.

* Boehner offers a two-step plan to force spending cuts. A $1 trillion hike in the debt limit would be paired with $1.2 trillion in spending cuts. A second debt limit increase, to continue borrowing authority through 2012, would be linked to a tax code overhaul and spending cuts for Medicare and Medicaid health programs for the elderly and poor as well as other benefit programs. Federal spending caps would be put in place and Congress would be required to vote on a balanced budget amendment to the U.S. Constitution.

* Senate Majority Leader Harry Reid offers a competing plan to raise the debt ceiling by $2.7 trillion, enough to cover the country's borrowing needs through the November 2012 elections. That would be paired with an equal amount of spending cuts over 10 years. The Social Security retirement program, Medicare and Medicaid would be left untouched and there would be no tax increases, a key Republican demand. A congressional panel would be established to find further spending cuts.

* Boehner calls Reid's plan "full of gimmicks."

* White House press secretary Jay Carney calls Reid's plan a "reasonable approach."

* House Democrats discuss the rival plans at a closed-door session on Monday evening.

* Investors are watching developments in Washington closely. U.S. stock indices dip in muted reaction to the debt-limit impasse. But the dollar falls to a record low against the Swiss franc and gold hits a new high.

* Secretary of State Hillary Clinton, in Hong Kong, seeks to reassure Asia that U.S. lawmakers will reach agreement and avoid a U.S. credit default. Asian investors hold $3 trillion in U.S. government debt. China and Japan hold the bulk of that debt. Clinton says she is "confident" U.S. lawmakers will avoid default.
http://www.reuters.com/article/2011/07/26/us-usa-debt-snapshot-idUSTRE76P0GO20110726