Congress set to vote on debt-ceiling deal
Washington (CNN) -- Congress is expected to vote Monday on a last-minute agreement to raise the federal government＇s debt ceiling while imposing sweeping spending cuts, a bipartisan deal that promises to narrowly avert an unprecedented national default with catastrophic economic consequences.
The deal calls for $2.4 trillion in savings over the next decade, raises the debt ceiling through the end of 2012, and establishes a special congressional commission to recommend long-term fiscal reforms.
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The measure needs to reach President Barack Obama＇s desk by Tuesday night. If the current $14.3 trillion debt limit is not increased by that point, Americans could face rapidly rising interest rates, a falling dollar, and shakier financial markets, among other problems.
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"This process has been messy," Obama said in announcing the deal shortly before 9 p.m. Sunday night. "It＇s taken far too long. I＇ve been concerned about the impact that it has had on business confidence and consumer confidence and the economy as a whole over the last month."
"Nevertheless, ultimately, the leaders of both parties have found their way toward compromise," he said. "And I want to thank them for that."
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It remains unclear whether congressional leaders have the votes to ensure the bill＇s passage, particularly in the House. Democrats are livid over the extent of the deal＇s domestic spending cuts, as well as the absence of any immediate tax hikes on wealthier Americans. A number of Republicans are worried about cuts in defense spending and the lack of a required balanced-budget amendment to the Constitution.
"Four trillion (in savings) was really our goal, and it still should be our goal," Sen. Dick Durbin, D-Illinois, said Monday on CNN＇s "American Morning." "That means putting everything on the table."
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The agreement revolves around a two-stage process.
The first stage includes $917 billion in spending cuts accompanied by a $900 billion increase in the debt ceiling.
Because of the pending Tuesday deadline, Obama would have immediate authority to raise the debt ceiling by $400 billion, which will last through September, according to the White House.
For the other $500 billion of debt ceiling extension in the first stage, Congress can vote on resolutions of disapproval subject to a presidential veto.
In the second stage, a special joint committee of Congress would recommend further deficit reduction steps totaling $1.5 trillion or more by the end of November, with Congress obligated to vote on the panel＇s proposals by the end of the year.
The committee would be comprised of 12 members -- six from each chamber, equally divided between Democrats and Republicans. The panel＇s recommendations would be due by November 23 and guaranteed an up-or-down Senate vote without amendments by December 23, according to the White House.
If the committee＇s recommendations are enacted, Obama would be authorized to increase the debt ceiling by up to $1.5 trillion. If the recommendations are not enacted, Obama can still raise the debt ceiling by $1.2 trillion. At that point, however, a so-called budget "trigger" would kick in, imposing mandatory across-the-board spending cuts matching the size of the debt ceiling increase.
The cuts would be split between defense spending and non-defense programs, an unpopular formula intended to motivate legislators to approve the committee＇s recommendations.
"You want to make it hard for (lawmakers) just to walk away and wash their hands," Gene Sperling, the director of Obama＇s National Economic Council, told CNN Sunday. "You want them to say, if nothing happens, there will be a very tough degree of pain that will take place."
The final debt ceiling increase in the agreement would also be subject to a congressional vote of disapproval that can be vetoed by Obama.
The agreement calls for both houses of Congress to vote on a balanced budget amendment to the Constitution, though it does not make a further increase in the debt limit subject to congressional passage of such an amendment -- something tea party conservatives were initially demanding.
In another key concession to Democrats, benefits from entitlement programs including Social Security, Medicaid, Medicare -- as well as veterans benefits -- will be exempt from any immediate cuts.
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Leaders on both sides of the aisle concede the deal is far from perfect.
Sen. John McCain, R-Arizona, said Monday that he worries the bill cuts too much in defense spending, but stressed that does not mean he will refuse to support it.
"Is this the deal I would have preferred? No," Obama said Sunday night. "I believe that we could have made the tough choices required -- on entitlement reform and tax reform -- right now, rather than through a special congressional committee process."
"But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year."
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House Speaker John Boehner, R-Ohio, told his caucus the deal represents a sorely needed compromise, but claimed a GOP victory for greater fiscal restraint.
"This isn＇t the greatest deal in the world," Boehner said, according to excerpts of remarks to House Republicans. "But it shows how much we＇ve changed the terms of the debate in this town."
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House Minority Leader Nancy Pelosi, D-California, refused to immediately endorse the deal, and said she would meet with fellow House Democrats on Monday to discuss it.
"I don＇t know all the particulars of what the final product is in writing and what the ramifications will be," Pelosi said Sunday night.
Asked about the outcome, she warned: "We all may not be able to support it, or none of us may be able to support it."
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A recent CNN/ORC International Poll reveals a growing public exasperation and demand for compromise. Sixty-four percent of respondents to a July 18-20 survey preferred a deal with a mix of spending cuts and tax increases. Only 34% preferred a debt reduction plan based solely on spending reductions.
According to the poll, the public is sharply divided along partisan lines; Democrats and independents are open to a number of different approaches because they think a failure to raise the debt ceiling would cause a major crisis for the country. Republicans, however, draw the line at tax increases, and a narrow majority of them oppose raising the debt ceiling under any circumstances. |
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