Government

Report: White House, Congress Close to Debt Deal, Have Agreed on Framework

WASHINGTON (AP) — White House and congressional negotiators sought to reassure the nation that they would beat a Tuesday deadline for averting the first federal default in history. But as Congress prepared to convene for a rare Sunday session, a final deal to raise the debt ceiling and reduce the deficit remained elusive.

Senate Republican leader Mitch McConnell said negotiators were “very close” to sealing a deal that would cut spending by some $3 trillion over the next decade while raising the debt ceiling through 2012 in a two-stage process. The Treasury says it will not be able to meet all its debt obligations if Congress does not act by Tuesday.

McConnell, appearing on CNN and CBS, said he hoped to soon be able to present to his fellow Republicans an agreement “that they’ll consider supporting.” That agreement would include raising the debt ceiling, cutting spending by some $1 trillion initially and creating a joint committee of members of Congress that would look at a larger plate of cuts that included tax and entitlement reform.

Democrats were more cautious in saying that the end of weeks of bitter debate was almost over. Senior White House adviser David Plouffe told NBC’s “Meet the Press” that both sides are generally in agreement on an emerging package that would cut the deficit in two stages, with key details still being worked out, but “we don’t have a deal.”

Sen. Chuck Schumer, D-N.Y., a member of the Democratic leadership, told CNN that while “there is no final agreement,” there was a sense of relief that the two sides were finally working on a compromise plan.

Schumer later told CBS that one of the last sticking points is the creation of a “trigger” mechanism that would hit priorities of both parties if the committee does not come up with a plan for further deficit reduction.

Among the trigger ideas being discussed are automatically reducing spending on entitlement programs such as Medicare along with closing tax loopholes or reducing defense and non-defense programs by an equal amount.

“It should be equally tough on Democrats and Republicans,” Schumer said.

McConnell said the bipartisan committee, which would be asked to come up with a plan by Thanksgiving, would have a “broad mandate” to look at all aspects of government finance, including tax reform.

McConnell said he had talked to both President Barack Obama and Vice President Joe Biden on Saturday. “I particularly appreciate that we are back talking to the only person in American who can sign something into law, and that’s the president of the United States,” he said.

McConnell said the deal being worked on, while raising the debt ceiling in two stages, would satisfy Obama‘s demand that there not be another divisive debate before next year’s election. The scenario being discussed would raise the debt ceiling unless there is a two-thirds majority in both houses of Congress to reject it.

McConnell said that there would be no tax increases in the deal, and White House National Economic Council Chairman Gene Sperling, on CNN and Fox, said there would be no revenue increases over the next year and a half.

But while keeping higher taxes out of the deal was the top priority of many Republicans, it’s still going to be a task for McConnell to sell any agreement to his caucus.

Sen. Lindsey Graham, R-S.C., said on ABC that this would be the first time that he could remember that the nation is paying for future debt increases dollar-for-dollar and that “from the Republican Party’s point of view, I think we can declare victory in a limited fashion.“ But he said that even with the agreement the national debt will continue to rise and ”I don‘t know where I’m going to land” on a vote.

“From a big picture,” Graham said, “I’m not ready to vote for this.”

On the House side, where GOP conservatives have pushed their party toward greater cuts and linking future debt ceiling raises to passage of a balanced budget amendment, a leadership aide said that while the negotiators appeared to be heading in the right direction, no agreement will be final until members have a chance to weigh in.

Sperling said Obama has presented three principles that the final package must meet: a significant down payment on deficit reduction, major entitlement and tax reform at a later date, and an end to the uncertainty created by the threat of the nation’s defaulting on the debt. He said the nation doesn’t want to “go through this mess again around the holidays.”

Under the proposed agreement, Congress would also have to vote on a constitutional amendment requiring a balanced federal budget, a top-flight GOP goal. Unlike a bill approved Friday by the Republican-run House, none of the debt limit increase would be tied to congressional approval of that amendment.

Details of a possible accord began emerging Saturday night after Senate Majority Leader Harry Reid, R-Nev., said on the Senate floor that the two sides were trying to nail down loose ends and complete an agreement.

“I’m glad to see this move toward cooperation and compromise, and hope it bears fruit,” he said.

A Democratic official said that while bargainers were not on the cusp of a deal, one could gel quickly. A Republican said there was consensus on general concepts but cautioned there were no guarantees of a final handshake. Both spoke on condition of anonymity to reveal details of confidential talks.

Any pact would have to quickly pass both chambers of Congress after a rancorous period that has seen the two parties repeatedly belittle each other’s efforts to end the standoff.

Even so, the deal under discussion offers wins for both sides. Republicans and their tea party supporters would get spending cuts at least as large as the amount the debt ceiling would grow and avoid any tax increases. For Obama and Democrats, there would be no renewed battle over extending the borrowing limit until after next year’s elections.

Under the possible compromise, the debt limit would rise by an initial $1 trillion.

A second, $1.4 trillion increase would be tied to a specially created congressional committee that would have to suggest deficit cuts of a slightly larger amount. If that panel did not act – or if Congress rejected their recommendations – automatic spending cuts would be triggered that could affect Medicare and defense spending, two of the most politically sacrosanct programs.

The government has exhausted its $14.3 trillion borrowing limit and has paid its bills since May with money freed up by accounting maneuvers.

McConnell and Schumer appeared on CNN’s “State of the Union” and CBS’ “Face the Nation” while Graham spoke on ABC’s “This Week.“ Sperling appeared on ”State of the Union“ and ”Fox News Sunday.”

Comments (74)

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  • JMorcan
    Posted on July 31, 2011 at 1:30pm

    We’re screwed no matter what they do. Not one of these people is talking about the real cause of the economic crisis or has a clue what to do about it.

    Report Post » JMorcan  
    • ginsberg
      Posted on July 31, 2011 at 7:57pm

      Pray tell, what caused the crisis? Unpaid for tax breaks and military spending played a part. Let me guess though, you think all those poor people brought us down. It is funny that wall street stole entire generations of wealth and the fools in the tea party think borrowing money to pay for needed programs is evil.

      Report Post »  
    • roadmaster
      Posted on July 31, 2011 at 8:49pm

      Tax the rich, that’s the ticket. Oh wait, rich people DON’T pay taxes, only those who EARN an income. Dhimmicrats really, really wish we could go back to the 90% tax rate from the 50′s and “punish” those greedy, rich bastids! If they checked history, they would discover that hardly ANYONE was stupid enough to pay that ridiculous rate – shelters, trusts and many ways to dodge taxes. Reagan actually pulled in more revenue when he dropped the top rate to 25%. Facts are pesky things.

      Report Post » roadmaster  
    • IMAWAKENOW
      Posted on July 31, 2011 at 10:23pm

      ginsberg: You bet, we think it is exactly because of all the people that have never produced anything but children and can‘t or won’t contribute to our economy. If the bottom 50% of wage earners could pay anything to taxs our problems as a country would be solved. Instead it is sooo much easier to blame those that keep this country moving. I have never gotten a job from a poor man. I have also never had to pay a rich man’s bills. If the top 50% income earners already pay 90% of the taxs, I would say they do their fair share and then some. You on the left have been promoting the class war for as long as I can remember. Pretty soon it will go from theory to actual war. If the producers in mass quit paying for the takers what do you think will happen? I’m still young enough to defend what is mine. I and millions more just like me have been prepairing for this. The next few months should be very interesting.

      Report Post » IMAWAKENOW  
  • BigPaulie
    Posted on July 31, 2011 at 1:29pm

    The comittee wont do jack, just like always. I am fed up with this nonsense.

    Report Post »  
  • Look4DBigPicture
    Posted on July 31, 2011 at 1:28pm

    Reid just voted against his own bill.

    Report Post »  
  • Bret
    Posted on July 31, 2011 at 1:24pm

    They can work on Sunday, but not Ramadan… Telling, isn’t it… Obama wants his final chapter on the American Economy in ink as a gift to Muhammad this Ramadan. They even worked their evil on Christmas Eve in the past. Didn’t ***** take it enough on the last deal? Now the Senate wants a piece… Please remember which forked-tongued individual you are making “Deals” with… This is truly no longer a Christian Nation:(….

    Report Post » Bret  
  • Stehekin912
    Posted on July 31, 2011 at 1:22pm

    This defict debate with all the rhetoric and cries of “dead in the water in the Senate” and “dead on arrival in the Senate” etc, has conjured a political cartoon in my imagination. Not a pretty one. Maybe Blazers can think of a better one.

    Two fencers in the white costumes with their faceguard masks on, each with one arm curled up over the head and the other out with the epee in a traditional fencing pose. On the handle of each epee says “deficit bill”. One fencer is “conservatives” and one is “liberals”. Each stands on the bank of a symbolic river that says “Rubicon”. The bank of the Conservative side says Free Republic. The bank on the Liberal side says Progressive Socialism. In the middle of the river is the American Citizen (or America) with the heart applique on his/her back and front, trying to cross the Rubicon toward the Conservative. Trying to cross the “point of no return” to reach the Free Republic. The Liberal has a bubble that says “Touche!” and the point of its epee is on (not in) the Citizen. The caption says “dead in the water”.

    I hope the cartoon can be changed to the Conservative reaching out to us and helping us up onto the Free Republic bank with a new caption: “Saved”.

    Report Post »  
  • don young
    Posted on July 31, 2011 at 1:21pm

    Get ready to get shafted.

    Report Post »  
  • oldchevyguy
    Posted on July 31, 2011 at 1:19pm

    I don’t want this agreement to go beyond the 2012 election.Why would any republican give them an advantage like that?

    Report Post »  
  • Miami Bob
    Posted on July 31, 2011 at 1:18pm

    I can not believe the GOP is caving in to Obama and his flunkies!!

    The democrats had no problem committing to social justice projects and obamacare before they had the money to pay for it.. Now they want to borrow more moneyl!! Something ells to think about, does anybody really know what happened to all the stimulus money and who was the recipients of it??

    Report Post » Miami Bob  
    • ginsberg
      Posted on July 31, 2011 at 7:50pm

      Wall street got most of the bailouts, sort of goes against the tea party’s stupid notion that obama is out to screw the rich. Wake up people, every politician, your boy rubio included, sold out a long time aggo.

      Report Post »  
  • 1bambam
    Posted on July 31, 2011 at 1:15pm

    Senator Jon Kyl is a dope ,,,,,,talk down to us moron ….to sell this piece of crap he say’s we have come a long way since April when Ubama wanted a clean vote on lifting the debt ceiling ……so Mr Kyl lets start with a ridiculous fiscally irresponsible pathetic proposal from Ubama and start with that move a little to the right of ridiculous and call that a fair bill…. …you can not be serious you fool !! everyone of these old school wash my back I’ll wash yours Republicans has got to go… there are going to be interesting primary’s we have to defeat them and the whole socialist I mean Democratic party

    Report Post » 1bambam  
  • banjarmon
    Posted on July 31, 2011 at 1:01pm

    THEY work for US…WE the PEOPLE Need to remind them….When is the TEA Party Rally going to be IN Washington???

    Report Post » banjarmon  
    • concealled9mms
      Posted on July 31, 2011 at 1:22pm

      thats a good question ill be there

      Report Post »  
    • Quarter
      Posted on July 31, 2011 at 1:28pm

      I’m Voting a straight Tea Party ticket.

      PALIN & ROBIO

      Report Post »  
    • Look4DBigPicture
      Posted on July 31, 2011 at 2:07pm

      I think I saw some TEA Party protestors in Washington on the news last night. However, they’re not getting the media attention anymore, since they were huge contributors of the shellacking of the Pres last year. The TEA Party has certainly made it’s impact on the way things are done, otherwise this debt ceiling would have been raised without a battle. Remember … this is only one battle … we have not yet lost the war. (metaphorically speaking of course) We need to rally our troops and vote in more strong Conservatives in 2012.

      Report Post »  
  • SychinLegacy
    Posted on July 31, 2011 at 12:57pm

    Guys why are you surprised? We all knew where boehner’s loyalties lie from the moment he called all of the tea party republicans into his office and scream at them until they caved and passed his sellout bill. There are more “progressive” republicans then not in Congress now.

    All we can do right now is pray that there are enough in Congress who have the balls to say “No more!” and weather the storm. Otherwise we may not make it to the 2012 elections.

    Report Post » SychinLegacy  
  • Look4DBigPicture
    Posted on July 31, 2011 at 12:54pm

    The TEA Party stood their ground and have done much more than I expected. I’m proud of every single one them, because they kept their word to the people who voted them into office. They are good stewards of our country.

    Unfortunately, we’re still under the thumb of big government and dysfunctional politicians. We need to continue educating ourselves, our friends, and family, to ensure the 2012 elections result in more TEA party representation, so our Republic can be returned to the People.

    Report Post »  
  • Stoic one
    Posted on July 31, 2011 at 12:53pm

    HEY CONGRESS!
    CUT spending
    CAP spending
    BALANCE THE BUDGET!

    My wife and I had to, my grown children had to, you can too! It just takes a little maturity and honest self appraisal to do so.

    OH! I forgot —- this is washington dc I am talking about/to.

    Report Post » Stoic one  
  • 1in300million
    Posted on July 31, 2011 at 12:49pm

    We need to vote for more Tea Party people in with
    Baseball bats to smash this corrupted establishment and replace
    it with principled common sense American value system.

    Report Post »  
  • Gypsy123
    Posted on July 31, 2011 at 12:48pm

    Tax payer and Americans we are probably screwed. When those groups compromise we are in big trouble but We shall see what they give us.

    Report Post » Gypsy123  
  • sWampy
    Posted on July 31, 2011 at 12:47pm

    What they bet the republicans cave, the RINOs must go, I’d rather not be in the game than to be raped constantly by a bunch of guys pretending to be girls.

    Report Post »  
  • 1in300million
    Posted on July 31, 2011 at 12:44pm

    There should be a law that if they can’t balance the budget and have a written plan
    to reduce the debt then whoever oppossed it should not be eligible for re-election.
    This should be common sense!
    The more I see these Democrat progressives lie
    it makes me wonder about the people who voted for them.

    Report Post »  
  • rflussier
    Posted on July 31, 2011 at 12:39pm

    Meh, I figured they’d cave. The debt increases will certainly be real, the cuts will never happen. The cuts never happened under Reagan’s negotiations with the democrats, nor Bush the Elder’s. They won’t happen now either.

    It’s cool. The sooner it all collapses, the sooner real americans can start the rebuilding process.

    Report Post »  
    • TNT1
      Posted on July 31, 2011 at 12:47pm

      Grab your ankles people

      Report Post »  
    • Look4DBigPicture
      Posted on July 31, 2011 at 2:15pm

      Don’t give up hope … have more faith in our TEA Party representatives. They’re way outnumbered and can only affect the outcomes to a certain point. They did good, and we need to rejoice in what they were able to accomplish. Even though they’re taking a tongue lashing by the spoiled brats, they stood their ground and more people are aware of how Washington works (or doesn’t work is more appropriate.) Stay focused, stand behind TEA Party Conservatives, and vote for more just like them in 2012.

      Report Post »  
  • watkinson
    Posted on July 31, 2011 at 12:37pm

    HOLD, HOLD — Conservatives please don’t FOLD — we’re behind you……….

    Report Post »  
  • BGECc
    Posted on July 31, 2011 at 12:32pm

    Republicans fold again!!! NO DEAL!!!! Anyone voting for this should be gone 2012.

    Report Post »  
  • absolutely
    Posted on July 31, 2011 at 12:31pm

    No, No, No, No, No more money, maybe in five to ten years will finally be able to get back a resonable economy. Absolutely

    Report Post »  
    • right-wing-waco
      Posted on July 31, 2011 at 12:42pm

      Oh goodie, they will cut spending by 3 trillion over the decade. WOOPIE, that 300 billion per year. We will spend 1 trillion 400 billion more that we take in and only cut 300 billion. That is still a Trillion in debt each year and over 10 trillion in the decade. THESE PEOPLE ARE NUTS. Start recalls now.

      John Galt time.

      Report Post »  
  • tifosa
    Posted on July 31, 2011 at 12:31pm

    Yep, the nation gets it now. If the Teapublicons can’t take the country back, they’re willing to take the country down.

    Report Post » tifosa  
    • A Doctors Labor Is Not My Right
      Posted on July 31, 2011 at 12:47pm

      @tifosa,

      “If the Teapublicons can’t take the country back, they’re willing to take the country down.”

      We’re trying to save the economy from Marxism.

      Raising the Debt Ceiling will only allow the government to borrow and print more money, rather than stopping its Marxist spending designed to collapse the economy into Socialism. Wealth comes from the private sector, and government is its overhead – you want the overhead as small as possible.

      Further, government-induced (or otherwise non-market-based) easy credit causes false booms (such as the Housing Boom), which must necessarily crash because real market values eventually reveal a mismatch between resources and demand.

      Would you be willing to watch this?

      Smashing Myths and Restoring Sound Money | Thomas E. Woods, Jr.
      http://www.youtube.com/watch?v=HAzExlEsIKk

      Report Post »  
    • Look4DBigPicture
      Posted on July 31, 2011 at 1:58pm

      @RIFOSA …The TEA Party is NOT trying to take the country down, they’re standing firm on their promise to change the way Congress operates. We’re in this mess because of shady deals and political smoke and mirrors used to keep Americans uninformed. If our gov‘t doesn’t show an honest commitment and plan to prove that we are cutting our spending, S&P has already promised to downgrade our rating. (Raising the debt ceiling is not the main issue.) The TEA Party’s not promoting default … they are instead raising the standard for how things will operate on the Hill in the future. Go TEA Party Go!!!!

      Report Post »  
    • tifosa
      Posted on July 31, 2011 at 3:10pm

      I read Meltdown. Along with several economists, I believe Woods’ fundamental fiscal theses to be myopic~ideologically driven. For example: the whole “too much government regulation,” to have caused the economic meltdown (in an obvious effort to vilify the federal government) TOTALLY discounts the central banks’ creation of the “credit default swap” scheme, the misinformation campaign, WallStreet’s mortgage investment structures….The whole blaming “government regulation, Barney Franks, Freddie and Fannie” is just off mark.

      Report Post » tifosa  
    • A Doctors Labor Is Not My Right
      Posted on July 31, 2011 at 5:21pm

      @tifosa,

      “For example: the whole “too much government regulation,” to have caused the economic meltdown (in an obvious effort to vilify the federal government) TOTALLY discounts the central banks’ creation of the “credit default swap” scheme, the misinformation campaign, WallStreet’s mortgage investment structures….The whole blaming “government regulation, Barney Franks, Freddie and Fannie” is just off mark.”

      This video doesn’t talk as much about government regulations (though obviously since prices come from individuals deciding how much they will trade for, to centrally plan/tinker with prices will create malinvestments).

      Rather, this video talks about commodity-money vs. fiat-money, and how having access to a printing press allows the government to play favorites (including banks, corporations, and Unions).

      Please watch this one, ok?

      Report Post »  
    • tifosa
      Posted on July 31, 2011 at 5:51pm

      He has zero cred in my book. Zero. As does the whole NARTH ideology. You and I, different planets DR.

      Report Post » tifosa  
    • tifosa
      Posted on July 31, 2011 at 5:53pm

      Although we may both hate the current bill :^)

      Report Post » tifosa  
    • A Doctors Labor Is Not My Right
      Posted on July 31, 2011 at 6:09pm

      @tifosa,

      “He has zero cred in my book. Zero. As does the whole NARTH ideology. You and I, different planets DR.”

      Then argue the points with me from the ground up. You and I go way back. :)

      Let’s start with the basic concept of trade. Why do people trade?

      Report Post »  
    • A Doctors Labor Is Not My Right
      Posted on July 31, 2011 at 7:47pm

      @tifosa,

      Ron Paul predicted that the Housing Bubble would crash. He believes in Austrian Economics like Tom Woods does.

      See here.

      Ron Paul Predicted The Collapse In 2003 – Morning Joe 5/15/2009
      http://www.youtube.com/watch?v=826q7RqTEk8#t=1m30s

      Report Post »  
  • BGECc
    Posted on July 31, 2011 at 12:29pm

    Here the republicans cave again!!! NO DEAL!!!!

    Report Post »  
  • wise grandma
    Posted on July 31, 2011 at 12:28pm

    So they are giving the Liar in chief another blank check so he can pay his people off to vote for him. Let’s see another stimiulus will do it.

    Report Post »  
  • heavyduty
    Posted on July 31, 2011 at 12:28pm

    Translation: The Republicans are closer to selling us down the river again. It looking like a few more are going to have to bite the dust before we get our message through.

    Report Post »  
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