What's the debt ceiling? ... What happens if we don't raise it by August 2? ... Is it even constitutional? ... Do we have to have this debate every year? ... Why do we have a debt ceiling to begin with?... What's the "McConnell Proposal"? ...

Tracking debt-ceiling developments as they break

1:17pm - Deal still unlikely; Fallback option moves to fore
"Mr. Obama signaled that he would support the fallback plan, proposed by Senator Mitch McConnell of Kentucky, the Republican minority leader, which would allow for the debt limit to be raised and defer the bigger budget fight." [New York Times]

10:24pm - REPORTS: White House deal fails; McConnell Proposal considered likely

White House talks failed yet again to produce a bipartisan solution. Speaker John Boehner signaled late Thursday that he's open to new options to avert a default next month, including the controversial McConnell Proposal, which would allow the president to unilaterally raise the debt ceiling without cutting spending [Politico]

6:11pm - Obama to Congress: YOU HAVE 24 HOURS
The president told congressional leaders a deal must be in place before the weekend, or else he'll seek a clean debt limit increase without spending cuts [Politico]

2:50pm - China begs U.S. to raise debt ceiling
"We hope that the U.S. government adopts responsible policies and measures to guarantee the interests of investors," Hong Lei, a Foreign Ministry spokesman, said. China holds more than $1 trillion in United States Treasury securities. [NYT]

1:38pm - Boehner: "I have no idea" if McConnell proposal can pass House
Three ways to see this: (1) He legitimately doesn't know; (2)  He's suspects it won't pass and needs to get a deal with spending cuts attached; (3) He suspects it would pass but he doesn't want to say so, because he'd prefer a few trillion in cuts.

11:35am - Camp David weekend? Not likely.
After reports Thursday morning that President Obama may invite congressional leaders to Camp David for the weekend if they can't reach a deal by Friday, John Boehner spokesman Michael Steel emailed reporters, saying, "The Speaker has told the White House he sees no need to go to Camp David this weekend."

10:35am - S&P: We'll downgrade, too
Standard & Poor's has warned lawmakers privately that it would downgrade the country's debt if the Treasury Department is forced to prioritize payments because Congress does not raise the debt limit, a congressional aide said on Thursday [HuffPo]

9:20am - U.S. to D.C.: It's okay, you can raise taxes
Gallup: Only 20% of Americans want the debt limit deal to include only spending cuts, with no tax hikes -- and only 26 percent of Republicans. [Weigel]

9:10am - Karl Rove to GOP: It's not okay to raise taxes
Op-ed: "Demanding the GOP vote for immediate tax increases that would be offset by vague, future tax cuts conjures up images of Charlie Brown, Lucy and the football. The tax increases would be real--the future tax rate cuts would be imaginary. And Mr. Obama has opposed any serious spending enforcement mechanisms, such as a balanced budget amendment or hard caps on spending." [WSJ]

9:05am - Pelosi likes the McConnell plan
"What Leader McConnell has put on the table recognizes that we must lift the debt ceiling; that we must do that," House Minority Leader Nancy Pelosi (D-Calif.) told reporters in her office Wednesday before meeting with a small group of young people on the debt-limit debate. "So it has that merit, in that it says, 'What are we talking about here?' We have to pass this, and let's talk about the other things as we go along.' "[Washington Post]

8:30am - Investor Bill Gross: Raise the damn ceiling [Washington Post]

WEDNESDAY

8:00pm - $1.7 trillion in cuts on the table?
Before POTUS vented at end of meeting about lack of compromise and "posturing," most of meeting focused on a wh plan detailing 1.7T in cuts [Chuck Todd]

7:30pm - Obama to Cantor: "Don't call my bluff"
Cantor relays quote to reporters: "'Eric, don't call my bluff,' Obama said. 'I'm going to take this to the American people.'"

7:22pm - Obama walks out of negotiations
House Majority Leader Eric Cantor says that Obama "abruptly" and "angrily" walked out of debt ceiling negotiations and suggested all progress in the debt talks has been wiped out. [Political Wire]

7:15pm - Moody's: U.S. is on notice for downgrade
Moody's noted"the rising possibility" that Congress might fail to raise the debt ceiling before August 2, which could lead to a U.S. default on its debt. [CNN]

7:10pm - It's coming down to taxes and entitlements
"Neither the president nor the House Republican leadership is truly ready to put agreement down on paper. For the president, the hesitancy is about giving a promise of real entitlement reform. For Republicans it's resistance to make a pledge that part of tax reform could mean the expiration of the Bush tax cuts on the wealthiest Americans (the Republicans)." [Chuck Todd]

6:40pm - D.C. and NYC, two cities separated by a common interstate
"There are people in Washington who get Wall Street, and people on Wall Street who get Washington. But they are a small minority in both places--and in both places, outcomes depend on the majority. I submit that this disconnect is dangerous. Wall Street is giving us too much rope to hang ourselves because they don't really understand the barriers to achieving fiscal sanity--and Washington is taking it, because they don't really understand how Wall Street thinks, and what the bond traders will do when they finally decide that we're likely to default. [Megan McArdle]

6:00pm - Mitchell: Default "destroys [GOP] brand"
The Senate Minority Leader gets way honest on the Laura Ingraham Show: "They want to blame the economy on us. The reason that default is no better an idea today than when Newt Gingrich tried it in 1995 is that it destroys your brand and would give the president an opportunity to blame us for the bad economy. Look, he owns the economy. He's been in office nearly three years now. We refuse to let us entice us in to co-ownership of a bad economy." [Dave Weigel]