Bill Clinton to Obama: Don't blink

Former President Bill Clinton is pictured at the Peter G. Peterson Foundation 2011 Fiscal Summit, May 25, 2011 in Washington, D.C. / Chip Somodevilla/Getty Images

Senators are forgoing their July 4th break to deal with the looming debt ceiling deadline. They will be back on Capitol Hill Tuesday to try and break the impasse over raising the federal debt limit and lowering the deficit.

But it's unclear how much progress they'll actually make, reports CBS News Congressional correspondent Nancy Cordes. There are NO talks scheduled this week between the White House and Congressional Republicans - who continue to insist tax increases are off the table.

"The last thing that employers need is further disincentives to not hire people, and that's what higher taxes would mean," said Sen. John Cornyn, R-Texas.

Former President Bill Clinton waded into the debate this weekend, arguing that a mini-deal - one that would fund the government for the next six to eight months - might be the best option if Republicans continue to balk at any new taxes.

Such a deal, though, would include a trillion dollars of already-agreed-to spending cuts.

Speaking at the 2011 Aspen Ideas Festival in Colorado, Mr. Clinton also advised President Obama to hang tough.

"The White House could blink," he said. "I hope that won't happen. I don't think they should blink."

Democrats led by President Obama are adamant that a deal to raise the debt ceiling and decrease the deficit should include what they call revenue raisers. Topping their list: Ending tax breaks for oil and gas companies, as well as companies that shutter plants in the U.S. and move jobs overseas.

Democrats are also calling for the elimination of subsidies for corporate jet owners and ethanol producers.

"Now, it would be nice if we could keep every tax break, but we can't afford them," the president said last week. "We've got to cut the deficit, but we can do that while making investments in education, research, and technology that actually create jobs."

Republicans and Democrats have little time to reach a deal. The Treasury Department says that if Congress doesn't raise the debt ceiling by August 2, the federal government won't be able to pay its debts - which could deal a body blow to the still-fragile economy.

At the Aspen conference Clinton argued that if Congress does not raise the debt ceiling, "it will make the deficit problem worse, and make it much more difficult to recover, because it will be harder for people to get credit - even harder than it is now."

Bill Clinton at Aspen Ideas Festival