Photo: AP Photo/Charles Dharapak
President Barack Obama and Congressional leaders announced they have reached a “historic, bipartisan compromise” to raise the debt limit and lower the deficit.The debt ceiling will be hiked in two stages the first with cuts agreed to now, and the second with cuts agreed to by a “Super Committee” of congressmen. If the second round of cuts were not agreed to, mandatory spending cuts, or “sequestration,” would take effect on programs sacred to both Democrats and Republicans.
As with the original McConnell plan, Obama would technically have to ask for a second debt ceiling hike, and would then have to veto any Congressional disapproval. This all but guarantees a debt limit increase, and Obama considers it nearly equivalent to the “one-shot” increase he has been demanding.
Congress will also hold a vote on a balanced budget amendment to the Constitution to placate conservatives, though it will certainly fail to reach the required two-thirds majority in both chambers.
11:03pm | That’s it for our live-blog tonight.
We’ll be back tomorrow morning with the latest on the vote-wrangling.
10:31pm | Bush tax cuts.
If the “Super Committee” fails to pass a balanced deal, President Obama will be able to veto an extension of the Bush tax cuts, which expire on the same day the mandatory spending cuts will go into effect.
10:12pm | Pelosi noncommittal.
“I look forward to reviewing the legislation with my Caucus to see what level of support we can provide,” she said in a statement.
9:55pm | The Deal.
From the White House:
- Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defence and non-defence spending.
- President authorised to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013.
- Bipartisan committee process tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform. Committee is required to report legislation by November 23, 2011, which receives fast-track protections. Congress is required to vote on Committee recommendations by December 23, 2011.
- Enforcement mechanism established to force all parties – Republican and Democrat – to agree to balanced deficit reduction. If Committee fails, enforcement mechanism will trigger spending reductions beginning in 2013 – split 50/50 between domestic and defence spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.
9:48pm | Beginning of the “age of austerity.”
Jonathan Alter on MSNBC: “Historians will look to tonight as the beginning of the age of austerity in America.”
9:47pm | How about some Merlot?
Rep. Mike Kelly to Speaker Boehner on conference call- grab a Gatorade and smoke a cigarette – you’ve earned it. Boehner response: How about Merlot?
9:44pm | Bachmann still a no vote.
GOP Presidential candidate Rep. Michele Bachmann (R-MN) says: “This isn’t the deal the American people ‘preferred’ either, Mr. President. Someone has to say no. I will.”
Another no votes is Rep. Jason Chaffetz (R-UT).
9:30pm | defence cuts cut.
A key sticking point earlier this morning was the scope of mandatory defence spending cuts that would take effect if the “Super Committee” recommendations failed to pass Congress. Those apparently have been minimized, The Washington Post reports.
9:09pm | Getting the votes.
Passage in the Senate is just about certain. In the House, though, it’s a lot less clear.
House Minority Leader Nancy Pelosi is expected to provide about 100 Democratic votes, while Speaker of the House John Boehner needs to bring between 120-130 Republicans to back the plan to ensure passage. It’s unclear whether either leader can bring those numbers, with liberals and conservatives jumping to oppose the plan.
9:02pm | Attention turns to “Super Committee”
Obama said “everything will be on the table” for deficit reduction by the bipartisan congressional group. He renewed push for a “balanced” solution including revenues to be adopted by that committee. Meanwhile Speaker of the House John Boehner said raising taxes in that committee would be “effectively…impossible.”
Lawmakers of both parties are critical of such committees, saying they rarely come through on what they promise.
The Committee will have until November to send a proposal to Congress for passage on an up or down vote, and if it fails, across the board spending cuts will take effect on programs considered sacred by both Democrats and Republicans.
8:51pm | Boehner’s remarks to GOP lawmakers:
“The press has been filled with reports all day about an agreement. There’s no agreement until we’ve talked to you. There is a framework in place that would cut spending by a larger amount than we raise the debt limit, and cap future spending to limit the growth of government. It would do so without any job-killing tax hikes. And it would also guarantee the American people the vote they have been denied in both chambers on a balanced budget amendment, while creating, I think, some new incentives for past opponents of a BBA to support it.”
“My hope would be to file it and have it on the floor as soon as possible. I realise that’s not ideal, and I apologise for it. But after I go through it, you’ll realise it’s pretty much the framework we’ve been operating in.”
“Since Day One of this Congress, we’ve gone toe-to-toe with the Obama Administration and the Democrat-controlled Senate on behalf of our people we were sent here to represent.”
Boehner says the deal makes raising taxes “nearly impossible,” and is encouraging his members to back the plan on a phone call now.
8:39pm | President Obama’s remarks on the debt deal:
Obama: There are still some very important votes to be taken by Congress, but the leaders have reached an agreement.
Obama: The ultimate solution must be balanced.
Obama: The second part of this agreement is so important. The super committee.
Obama says $1T in cuts now. Super Committee will push further reductions later this year.
Obama: “Everything will be on the table” for that committee.
Obama: Is this the deal I would have preferred? No.
Obama: This will allow us to avoid default, and end the crisis that Washington imposed on America
Obama: This ensures we will not face this same kind of crisis in 6 months, or 8 months, or 12 months.
Obama: This process has been messy; it’s taken far too long.
Obama: Ultimately the leaders of both parties have found their way to compromise.
Obama: We’re not done yet–I want to urge the members of both parties to do the right thing.
Obama also thanked voters for contacting their representatives, and encouraged them to continue until a deal is passed.
8:38pm | Obama speaking in two minutes.
8:35pm | Senate adjourns for the night.
Vote will be tomorrow.
GOP meeting in morning to discuss the framework.
“There is now a framework to review that will insure significant cuts in Washington spending”
“I can say with a high degree of confidence,” that there is a framework; there will be no default.
Reid: Neither party, neither chamber can do this alone.
Senate Democrats meeting at 11am tomorrow.
7:49pm | “A sugar-coated Satan sandwich.”
That’s what Rep. Emanuel Cleaver (D-MO) called the plan currently being formulated to raise the debt ceiling.
6:59pm | POLITICO’s Jake Sherman reports the GOP conference call has been scheduled for 8:30 pm.
We expect a statement from Boehner after that.
6:21pm | Nancy Pelosi speaks:
Reuters: House Democratic leader Pelosi says House Democrats will meet on Monday to determine how to proceed in debt deal
Pelosi: “We all may not to support it, or none of us may be able to support it.”
Pelosi said Congress has determined the country won’t default, that Social Security checks will go out, military get paid, and all obligations honored.
Pelosi: “I haven’t seen the final product and I’ll have a discussion with my caucus as to how this comes down.”
Pelosi: “This bill has long ramifications, 9, 10 -years, we need to take a look and see if we can support it.”
6:14pm | House GOP conference call still has not taken place.
House Republicans still have not heard from Speaker of the House John Boehner, who pledged to confer with them before he agrees to any deal to raise the debt limit.
5:52pm | Liberal opposition coalescing.
FOX News’ Chad Pergram reports: Progressives and the Congressional Black Caucus plan presser on Monday to ask Obama to invoke 14th Amendment to avoid debt crisis. 11 am.
5:08pm | Reid signs off.
Reid Spokesman Adam Jentleson emails: “Senator Reid has signed off on the debt-ceiling agreement pending caucus approval.”
5:03pm | defence cuts as the sticking point?
There are multiple reports that the hold-up to a deal is the amount of defence spending cuts that would take effect if the bipartisan “Super Committee” cannot reach an agreement on spending cuts.
NBC’s Luke Russert reports Democrats want 3% cuts to the defence budget, while the GOP wants 2% or less.
The point of these “triggers” is to incentivise the committee to reach an agreement and for Congress to pass it, but some in Congress don’t want to risk it.
4:43pm | Reid hopes to have vote tonight.
“I hope so” Reid told reporters after meeting with House Democrats, when asked if the Senate would vote tonight.
Update: Reid Spokesman Adam Jentleson tweets “not true” in response.
4:17pm | Conservatives also upset with deal.
Heritage Action for America says it will oppose the Obama-McConnell compromise.
4:13pm | Rand Paul “probably” won’t object to unanimous consent to speed up vote:
Sen. Rand Paul (R-KY) and Sen. Mike Lee (R-UT) tell POLITICO they will probably not object to a unanimous consent agreement to fast track a debt limit deal.
“I think we have to have a 60-vote margin, and I probably won’t object if there’s a time agreement,” Paul told POLITICO.
4:10pm | Confidence.
Sen. Susan Collins (R-ME) on Fox News:
“When I talked to … Mitch McConnell a few hours ago, he was more confident of a deal than I’ve seen him be.”
3:33pm | Will Democrats get on board?
Liberal Democrats are already lining up in opposition to the compromise being worked out between President Obama and Senate Minority Leader Mitch McConnell to raise the debt limit and cut the deficit.
Progressive Caucus Chairman Rep. Raúl Grijalva (R-AZ) released a statement opposing the plan.
“This deal is a cure as bad as the disease,” he said. “I reject it, and the American people reject it. The only thing left to do now is repair the damage as soon as possible.”
“Seeing a Democratic president take taxing the rich off the table and instead push a deal that will lead to Social Security, Medicare, and Medicaid benefit cuts is like entering a bizarre parallel universe…”
3:01pm | Democrats meeting.
Reid, Durbin, Schumer arrive in House Minority Leader Pelosi’s office for meeting with House Democratic leadership. Reid told reporters he was “cautiously optimistic.”
Obama reportedly told Pelosi and Reid that a deal would not be final unless they supported it.
2:13pm | Unanimous consent.
Any deal to raise the debt limit by August 2nd will now require “unanimous consent” in the Senate. Senate rules allow members unlimited debate time, barring an agreement to contrary or a “cloture” vote to end debate.
A cloture vote requires not just 60 votes, but also a one-day “ripening” period, and still allows for 30 hours of debate after the vote. If one Senator unhappy with the plan currently being negotiated by Senate Minority Leader Mitch McConnell and President Barack Obama objected to ending debate, a final vote would not be held until Wednesday — assuming cloture is filed by 11:59 pm today.
1:39pm | Senate in recess subject to the call of the chair.
Votes still possible this evening.
1:31pm | Deal not there yet.
Senate Majority Leader Reid says the deal is “not there yet.”
He implies that Senate Minority Leader Mitch McConnell is taking the lead on the negotiations with the White House, and that he is not actively a part of them.
1:26pm | Cloture vote on Reid measure fails.
As expected, Reid did not have the required 60 votes to end debate on his plan. Reid voted no on his plan to be sure he can maintain the “House vehicle” — the underlying Boehner plan — to get expedited consideration of the ultimate compromise to raise the debt limit.
All Republicans but Sen. Scott Brown (R-MA) and Democrats Joe Manchin (D-WV), Ben Nelson (D-NE), and Bernie Sanders (I-VT) voted against ending debate on the Reid measure.
The final tally: 50-49. 60 yea votes were required.
1:04pm | The House gaveled into session.
Now in recess subject to the call of the chair — initially scheduled to be a quick “gavel-in, gavel-out” pro forma session, Speaker Boehner is leaving open the possibility of resuming work later today.
12:57pm | No deal yet.
White House Communications Director Dan Pfeiffer tweets: “Despite all the reporting, no deal has been reached, there are still impt issues to work out, and a lot of bad info is floating out there.”
12:54pm | Extremely rare debate happening on the Senate floor.
Senator John McCain (R-AZ) and Senator Dick Durbin (D-IL) are holding a true debate on the Senate floor — which rarely ever happens in the upper chamber.
McCain says “You can’t keep B-I-O-B–you can’t keep Blame It On Bush.”
Durbin is pushing back on McCain’s demands for more spending cuts and no tax increases.
McCain: “Not fair to say we can pass a balanced budget amendment in the Senate at this time.”
Both McCain and Durbin say the debt limit must be raised, and that it should not be held hostage.
“Discussions are underway on legislation that will cut government spending more than it increases the debt limit, and advance the cause of the balanced budget amendment, without job-killing tax hikes.”
“Talks are moving in the right direction, but serious issues remain. And no agreement will be final until Members have a chance to weigh in”
House Republicans will be briefed on the specific in a conference call this afternoon.
12:04pm | Reid vote still scheduled for 1pm.
Senate Majority Leader Harry Reid said the Senate will still vote on his plan to raise the debt limit today.
Reid reading from AP report citing soldiers concerned about supporting their families if debt limit isn’t raised.
Reid says he and Obama are “hopeful” that a deal is near. “We are cautiously optimistic,” adding serious issues remain to be resolved in the next few hours.
“There’s no agreement that has been made, but we’re optimistic one can be reached.”
Reid thanks McConnell for being a “cheerleader” on this compromise.
Reid: “Cooperation is the only way forward. Compromise is the only way forward.”
12:01pm | Senate Chaplain Barry Black’s prayer:
“Save us, O God, for the waters are coming in upon us….We are weary from the struggle, tempted to throw in the towel, but quitting isn’t an option”
11:28am | War Savings Were Always Irrelevant.
Republicans made a big deal last week about Senate Majority Leader Harry Reid including $1 trillion in “war savings” in his plan to raise the debt limit but this was always a fake issue.
“War savings” have always been irrelevant to these negotiations. This has been about triggers pushing the “Super Committee” to reach deal that can pass Congress. Republicans wanted a debt limit increase as an incentive, Democrats didn’t. Now they are negotiating alternatives.
11:26am | Political default.
Tom Brokaw had tough words for Washington on Meet the Press today: “I’m not very confident about where we are right now, because there is a political default that is already in place.” he said. “‘This is a sad commentary on our system and our inability to manage the greatest country in the world.”
11:23am | The Senate is set to convene at noon.
At that point we’ll know just how close we are to a deal. Senate Majority Leader Harry Reid will decide whether to continue with a procedural vote on his plan, scheduled for 1 pm, or wait for the McConnell-Obama compromise to be finalised.
11:13am | “This is not a crisis.“
Rep. Raul Labrador (R-ID) says “this is not a crisis. We will get a deal done, I might not support this, but we will get this done.”
He says he thinks there are enough votes in the House for the compromise plan to pass.
11:07am | The trigger package.
Multiple reports are pointing to the “triggers” for the “Super Committee” working as follows:
If the committee’s recommendations are rejected by Congress by Thanksgiving, and a balanced budget amendment to the Constitution is not passed by both houses of Congress, then $1.2 trillion in cuts would be implemented. The cuts would impact defence and medicare spending — the point being these cuts would incentivise the adoption of the Super Committee’s recommendations.
11:02am | Wasting a week.
Senate Minority Leader Mitch McConnell said the deal coming together today was essentially in place a week ago. Taking a shot at Speaker of the House John Boehner, President Barack Obama and Senate Majority Leader Harry Reid he said “Fox News Sunday” that “we kind of wasted a week throwing volleys at each other across the Capitol.”
10:48am | Serious issues remain.
A House GOP leadership aide on debt plan sketched out by McConnell: Talks are “moving in right direction” but “serious issues remain.”
10:45am | Schumer on “Face the Nation”
“Key word on the triggers is equality”
Democrats think the triggers should have revenues, or at least significant defence spending cuts.
“If the triggers are equally tough it gives us an opportunity to get something done.”
10:39am | Things need to happen faster.
Mohamed El-Erian to ABC’s This Week: “Things that need to happen are not happening fast enough. If S&P sticks to what it said, it will downgrade.”
10:32am | McConnell on CBS’s Face the Nation:
“The potential agreement is within our reach.”
He says he is confident a deal will be struck without revenues.
McConnell says he will tell his caucus ‘let’s get as much spending as we can get from a government we don’t control.’
He says the “Super Committee” is not another commission. It is a congressional committee whose findings must be voted on an “up-or-down” vote, without amendments.
McConnell says the “Super Committee” can look at tax reform. He doesn’t explicitly say whether it could raise taxes.
McConnell says he thinks the vote in the Senate will be bipartisan. He says “we are very, very close to something I’d be comfortable recommending to my members.”
McConnell: All Republicans want a smaller government and don’t want to raise taxes.
10:28am | Krugman says no to any spending cuts.
Economist Paul Krugman says any spending cuts will slow the economy further during the recession. He says “we will envy Japan” during their “lost decade.”
He added that with these spending cuts, unemployment may be above 9 per cent at the end of 2012.
Graham says he doesn’t “see many conservatives getting behind this deal.”
He says he expects only about half of the GOP conference in the House to back the deal. This would require a substantial number of Democratic votes — which will not come easily.
Graham says the U.S. will become Greece “In the next 15 or 20 years,” and adds that he is thankful for tea partiers for opposing spending.
10:14am | Balanced Budget Amendment no required.
Senate Minority Leader Mitch McConnell says a balanced budget amendment would not be a condition for a debt limit increase, but there will likely still be a token vote on one in both the Senate and the House.
10:11am | Triggers continued.
The incentives for the “Super Committee” remain the biggest sticking point in the debate. David Plouffe, senior advisor to President Obama, said the triggers will have to include both defence and non-defence cuts.
These mandatory cuts in the event a deal isn’t reached makes defence contractors and other stakeholders advocates for a compromise within this committee.
10:07am | No deal yet.
Is there a deal? “No, there’s not,” says David Plouffe, senior advisor to President Obama on ABC’s This Week.
9:52am | “General Agreement”
On Meet the Press, David Plouffe, senior advisor to President Obama, said Democrats and Republicans are in “general agreement” on a debt deal as outlined.
9:49am | Mixed messages on revenues.
On Meet the Press, White House Senior Advisor David Plouffe says the “Super Committee” will look at revenues: “It’s going to be charged with looking at our entire deficit reduction problem .. things like tax reform and revenue.”
But Republicans have insisted all morning that there will be no taxes included in the deal, now or later.
9:48am | Can it pass the House?
GOP Whip Rep. Kevin McCarthy (R-MD) on Fox News Sunday. He wouldn’t say whether it would pass the House, but said it’s “moving in the right direction.”
9:43am | Enough to avoid a downgrade?
Moody’s chief economist Mark Zandi, who is not a member of the ratings agency, tells CNN that “based on what I’ve heard from them, I think this would be sufficient..to avoid a downgrade”
This is “great news… if they can pull this off I think we will be in good shape”
He added some agencies might go down a “different path.”
9:35am | Obama still pushing for revenues.
Gene Sperling (Chairman of the National Economic Council) on CNN: President is still insisting on revenues as part of a final deal on entitlements. Need shared sacrifice.
Sperling said Obama wants the revenues to come out of the bipartisan “Super Committee” which will agree to $1.8 trillion in cuts by the end of this year.
9:31am | Triggers.
On CNN, Senator Chuck Schumer (D-NY) says the triggers pushing the “Super Committee” to make a deal must be equally painful to both sides.
Senate Minority Leader Mitch McConnell said potential triggers include Medicare and defence spending.
9:22am | Schumer says there are “very real disagreements that have to be bridged”.
Schumer says it’s ‘Too early to tell’ if Democrats would provide the bulk of support for the debt deal.
9:16am | This is not a final agreement.
Sen. Chuck Schumer: “This is not a final agreement. No one has signed off on a final agreement.”
“Default is much less of a possibility [today] than it was even a day ago.”
Schumer tells CNN it’s “clear” the debt ceiling will be raised through 2012
9:04am | On CNN, Mitch McConnell says “We’re very close to a deal”.
“We had a very good day yesterday,” he said, adding that the two sides “made dramatic progress.”
“I think I can pretty confidently say” that the current plan under discussion will provide a debt ceiling increase to avoid default, he said.
McConnell said that he is “very, very close to being able … to recommend to my members that this is something that they ought to support.”
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