As reported earlier, Senate Majority Leader Harry Reid has signed off on a deal to end the
hostagedebt ceiling crisis.
Via TPM, here are the details of the negotiated deal:
The deal works like this:
It guarantees the debt limit will be hiked by $2.4 trillion. Immediately upon enactment of the plan, the Treasury will be granted $400 billion of new borrowing authority, after which President Obama will be allowed to extend the debt limit by $500 billion, subject to a vote of disapproval by Congress.
That initial $900 billion will be paired with $900 billion of discretionary spending cuts, first identified in a weeks-old bipartisan working group led by Vice President Joe Biden, which will be spread out over 10 years.
Obama will later be able to raise the debt limit by $1.5 trillion, again subject to a vote of disapproval by Congress.
That will be paired with the formation of a Congressional committee tasked with reducing deficits by a minimum of $1.2 trillion. That reduction can come from spending cuts, tax increases or a mixture thereof.
If the committee fails to reach $1.2 trillion, it will trigger an automatic across the board spending cut, half from domestic spending, half from defense spending, of $1.5 trillion. The domestic cuts come from Medicare providers, but Medicaid and Social Security would be exempted. The enforcement mechanism carves out programs that help the poor and veterans as well.
If the committee finds $1.5 trillion or more in savings, the enforcement mechanism would not be triggered. That's because Republicans are insisting on a dollar-for-dollar match between deficit reduction and new borrowing authority, and $900 billion plus $1.5 trillion add up to $2.4 trillion.
However, if the committee finds somewhere between $1.2 and $1.5 trillion in savings, the balance will be made up by the corresponding percentage of the enforcement mechanism's cuts, still in a one-to-one ratio.
Dave Weigel says there are still some unresolved issues. Such as:
Those pesky defense cuts. Republicans and Joe Lieberman have both vocalized their concerns with defense cuts and want to talk them down. Once that wrinkle is figured out, we'll see an amendment that codifies all of this. The Boehner bill will be brought off the table in the Senate. The amendment will be voted on; it will succeed, if everyone's agreed.
Ah, Joe Lieberman. Of course he has to jump in—with the Republicans. Because he's with us on everything but the ... uh ... what was it again?
While Reid is hoping for a vote on his deal tonight, those infamous anonymous sources are saying a vote before tomorrow is unlikely.
