Congress Finally Reaches Deal on Debt Ceiling
White House: "A win for the economy and budget discipline"
Congressional leaders have finally come to an agreement on how to raise the nation's debt ceiling before defaulting on millions of important bills, while coming up with a plan to reduce the nation's alarming deficit. President Obama said, "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."
The details of the agreement can be read at this fact sheet. Here are some of the highlights:
· Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.
· President authorized 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 defense spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.