Harry Reid on U.S. debt default: “We’re about to go over a cliff here”

"We're about to go over a cliff here."

Those are the words uttered today by top Democrat in the Senate Harry Reid.

Reid's dire warning came as both sides today put forth very different plans in Washington, D.C. to 1) raise the U.S. debt ceiling, and 2) avert the possible economic calamity of the U.S. defaulting on its $14.3 trillion in debt. 

Here's the latest on those emerging versions, according to the New York Times:

House Republican leaders pushed for a vote Wednesday on a two-step plan that would allow the federal debt limit to immediately be raised by about $1 trillion and tie a second increase next year to the ability of a new joint Congressional committee to produce more deficit reduction. But top Senate Democrats called the proposal a “non-starter” and said they would advance their own plan to reduce the deficit by $2.7 trillion and raise the debt ceiling until after next year’s elections, saying it met the conditions that Republicans had laid down during the ongoing debt fight.

President Barack Obama has endorsed the Reid version, which would cut $1.2 trillion from federal agency budgets over the next 10 years, the Times reports. 

Meanwhile, charts are good. So as the two sides continue their political blame game here's an instructively simple graph (again from the Times), and cited by James Fallows at the Atlantic today: 

For more on who really owns America's $14.3 trillion debt, see this Macro blog post from last week. (Hint: it's not China).

GlobalPost's David Case, meanwhile, has more advice on how the two sides should quickly get together to solve this debt ceiling problem. In our new series The Negotiator, Case interviewed Wharton negotiation expert Stuart Diamond.

As for how the markets reacted today to the ongoing drama in Washington, check out the latest from our friends at CNNMoney.