President Obama and House and Senate leaders of both Parties tonight reached a debt ceiling deal that will lower the projected deficit by about $2.4 trillion, avoiding another debate over the debt limit before Election Day 2012.
The sum is about the amount needed to extend the debt ceiling through 2012 without increasing the nation’s red ink, meeting a key GOP demand. The deal also apparently raises no taxes. But it allows Obama to avoid having to face the issue again while he campaigns, which appears in the end to have been his only non-negotiable demand.
POLITICO’s David Rogers, who has covered budget issues for years and has impeccable sources, has some of the details of arrangement.
The proposal builds on elements of a House-passed bill credited with saving $917 billion over the next 10 years and raising the ceiling by $900 billion that would carry the government through the end of this year.
In the interim, a new joint congressional committee would be charged with coming up with $1.5 trillion in additional deficit reduction, less than the target set in the House measure, but still judged sufficient to match the Treasury’s remaining borrowing needs to get though the 2012 election year.
To give some added flexibility, the plan appears to allow for a situation where the committee won’t meet its full target but still generates $1.2 trillion in savings, for example, to match a debt increase. And across-the-board cuts could be used to fill the gap if needed.
Obama stepped into the briefing room this evening to announce the deal and urge members of Congress to pass it.
Now, is this the deal I would have preferred? No. 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.
Most importantly, it will allow us to avoid default and end the crisis that Washington imposed on the rest of America.
Here’s the full Obama video, courtesy of CNN: