According to numerous reports, President Obama, the Democrats, and Republican leadership have reached a tentative framework for what the final debt-ceiling deal will look like.
There's so much spin flying around right now on both ends of the spectrum, I suggest wearing a helmet at all times. And for those looking for the basics and not the spin, I would direct your attention here:
The agreement looks like this: if the super-committee tasked with entitlement and tax reform fails to come up with $1.5 trillion in deficit reduction that passes Congress, the “neutron bomb” goes off, -- as one Democrat put it -- spending cuts that will hit the Pentagon budget most deeply, as well as Medicare providers (not beneficiaries) and other programs.
If the super-committee comes up with some deficit reduction but not $1.5 trillion, the triggers would make up the difference.
So it’s a minimum $2.7 trillion deficit reduction deal.
And the debt ceiling will be raised by $2.4 trillion in two tranches: $900 billion immediately, and the debt ceiling will be raised by an additional $1.5 trillion next year – either through passage of a Balanced Budget Amendment, which is unlikely, or with Congress voting its disapproval..
So basically what we have here is Harry Reid's proposal combined with Mitch McConnell's "escape-hatch" proposal.
The Republicans can have their nonsensical vote on a nonsensical Balanced Budget Amendment, but we all know that will never actually be signed into law, so we're left with Congress simply voting on symbolic condemnation of the debt-ceiling in exchange for increasing it. Whoopty-do.
The bill would see roughly $1.2 trillion dollars in cuts over the next ten years signed into law up-front, and if the so called "super congress" committee doesn't agree to more cuts in the future, Medicare providers and the Pentagon will be cut to make up the difference.
President Obama says he will veto any extension of the Bush Tax Cuts if the same "super congress" committee doesn't reform the tax code to increase revenue.
Medicaid and Social Security are not a part of this deal. At all.
The details are subject to change, and we don't know what all of them are yet, but this is the gist of it.
Contrary to the objections of John Boehner, and in a fashion simiar to the compromise over the fiscal 2011 budget, the up-front cuts that are signed into law will more than likely carry with them a great deal of gimmicky accounting which writes off savings as spending cuts. We should know within a week or two just how much of it is actually real, serious cuts.
This is not a perfect deal, but it was never going to be. From the moment the Teabaggers rose to power in 2010, we all knew the pain was coming. The only question remaining was how much pain.
The Right is already screaming "cave-in."
The Left is already screaming "cave-in."
And the middle will surely say "I'm glad we're not defaulting."
We're going to be faced with another potential government-shutdown scenario in two months, so dust yourselves off and be ready to confront another round of treasonous hostage-taking by the Far-Right.
Adding... In case it wasn't abundantly clear -- yes this is the wrong time to be cutting spending, but as long as the Republicans have The Bomb and are willing to use it, there isn't much choice.