Deal Framework Reached on Raising U.S. Debt Ceiling

[xchrom]

http://www.bloomberg.com/news/2011-07-31/white-house-republicans-said-to-reach-tentative-deal-on-u-s-debt-ceiling.html

President Barack Obama and congressional leaders began a fresh attempt to reach agreement on raising the U.S. debt cap, with a potential framework for a deal emerging two days before a default deadline.

The White House and congressional Republicans have sketched out the contours of an agreement to increase the nation’s $14.3 trillion debt ceiling that would raise borrowing authority through the next presidential election, a person familiar with the talks said late last night.

White House officials familiar with the talks cautioned after reports of the framework surfaced last night that no final agreement has been reached among those involved and that negotiations were continuing. Senator Richard Durbin of Illinois, the Senate’s second-ranking Democrat, said on “Fox News Sunday” today that “key elements” were still being resolved.

The tentative framework includes immediate spending cuts of $1 trillion and creation of a special committee to recommend additional savings of up to $1.8 trillion later this year. The new panel would have to act before the Thanksgiving congressional recess in late November and Congress would have to approve its recommendations by late December or government departments and programs, including defense and Medicare, would face automatic across-the-board cuts, the person said.

[chill_wind]

1. Triggers and Commissions

Senator Olympia Snowe, a Maine Republican, said the trigger is essential to a deal. “You have to have it,” she said. “That does tie to whether or not Treasury securities are downgraded by the ratings agencies,” she said.

That it somewhat directly contradicted here:

Even if the parties can reach agreement to avoid a possible default on Aug. 2, Congresses have repeatedly ignored or overridden automatic cuts dictated in previous legislative agreements.

For that reason, budget and credit rating experts are skeptical of the device, and they are even more critical of the call in both the House and the Senate for identifying future cuts through a newly created bipartisan committee -- another Washington mainstay that can’t guarantee any real impact.

Debt Plan Spending-Cut ‘Trigger’ Has Failed in Past (Bloomberg)
July 29, 2011, 11:48 AM EDT
By Heidi Przybyla


And a little more regarding the commission stuff (but McConnell says stop saying that! it's a committee!)


"Formulating an effective way to hold Congress to its promises to make the choices required to slash trillions in spending in the next decade is key to satisfying demands by credit rating services like Standard & Poor’s for a credible commitment to taming the long-term debt.

Without enforcement powers, any new bipartisan committee may not be taken seriously on Wall Street and by ratings agencies, said David Ader, head of government bond strategy at Stamford, Connecticut-based CRT Capital Group LLC.

Toxic Term

At least three commissions in the past year have failed to offer a plan that gained traction, including Obama’s National Commission on Fiscal Responsibility and Reform, a group of six senators often called the “Gang of Six,’’ and a bipartisan panel of lawmakers led by Vice President Joe Biden.

A reference to a “bipartisan deficit commission” has become so toxic in Washington that Senate Minority Leader Mitch McConnell, a Kentucky Republican, admonished reporters who used the term, insisting they call the proposed new panel a “committee.” That hasn’t diminished the skepticism."



But both sides have sure seemed bipartisanly hell-bent on the commission stuff.

[ljm2002]

2. "The White House and congressional Republicans"...

..."have sketched out the contours of an agreement".

The White House and... congressional Republicans.

I thought Congress wrote bills. I did not realize it was the President, working only with leaders of the opposite party, who wrote bills.

Well I guess you could call it "transformative". So there is that.

[chill_wind]

3. It's pretty clear

Reid was once again asked to get out of the way at the last minute last night.

Since other things were going on in the background.

Reid said White House officials asked him to postpone a vote on legislation he crafted to raise the debt ceiling by $2.4 trillion and cut spending by an equal amount.

Many details of the tentative bipartisan deal remain unresolved, according to Reid.

“There are many elements to be finalized and there is still a distance to go before any arrangement can be completed,” Reid said.

“I believe we should give everyone as much room as possible to do their work,” he said. “I spoke to the White House quite a few times this evening, and they’ve asked me to give everyone as much time as possible to reach an agreement, if one can be reached.”

Reid postponed a vote to end a GOP filibuster of his plan until 1:00 pm Sunday. The Senate adjourned at 10:13 p.m. Saturday and will reconvene at noon Sunday.

http://thehill.com/homenews/senate/174555-reid-postpones-vote-to-end-gop-filibuster-of-his-debt-limit-plan

[RUMMYisFROSTED]

4. "...including defense and Medicare, would face automatic across-the-board cuts..."

The cuts to Medicare are going to come through the back door, apparently.

[RUMMYisFROSTED]

5. A sneaky way to keep everyone's fingers "clean," too.

:argh:

[madfloridian]

6. "The White House and congressional Republicans have sketched out the contours of an agreement "

Where the hell are the Democrats? He seems more concerned with pleasing Republican extremists.