Here are the features according to a White House fact sheet distributed to reporters shortly after the president spoke:
- The president will be authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for another increase until 2013.
- The first tranche of cuts will come in at nearly $1 trillion. That includes savings of $350 billion from the Base Defense Budget, which will be trimmed based off a review of overall U.S. national security policy.
- A bipartisan committee with enhanced procedural authority will be responsible for pinpointing $1.5 trillion in deficit reduction from both entitlements and tax reform, as well as other spending programs.
- The committee will have to report out legislation by November 23, 2011.
- Congress will be required to vote on Committee recommendations by December 23, 2011.
- The trigger mechanism -- should the committee's recommendations not be acted upon -- will be mandatory spending cuts. Those cuts, which will begin in January 2013, will be split 50/50 between domestic and defense spending. Social Security and Medicare beneficiaries and "low-income programs" would be exempted from those cuts.
"The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester [the trigger mechanism] would go into effect," the fact sheet reads. "These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts."
I think in the urgency to raise the debt ceiling, this is a far better deal than the Boehner plan; but now we still have to go through the tough negotiations in this special committee. But at least that will be once removed from electoral posturing.
I'm most upset that the focus is on spending cuts when what we need is jobs. Even the Chamber of Commerce -- the voice of business -- warned that too much spending cuts right now will increase joblessness.
Ralph
More details are coming out, this one not good. There is not extension of unemployment benefits.
ReplyDeleteHowever, here is one way the Repubs backed down. They had insisted that there be a firewall around defense spending. The Dems compromised by agreeing to include all forms of security (State Department, Homelands Security, etc) on that side of the firewall. Then the Repubs agreed.
So roughtly half of the cuts will come from security spending and half from non-security spending (like education and medical research and Medicare providers, but not Medicare benefits or Social Security.
That last bit isn't good. More cuts to the providers of Medicare will reduce the number of providers, because fewer and fewere will accept Medicare patients. So it will hurt the patients in the long run.
Paul Krugman and other progressives this morning are calling this deal a catastrophe, because it is all spending cuts and no unemployment benefits.
ReplyDeleteSaying that once again Obama gave in, when he didn't have to. That it is a big win for Republicans. Well, maybe. I wish it had turned out exactly like Krugman wanted. I did too. But that was unrealistic. Maybe a tougher Obama could have done better, but I don't think it's quite a catastrophe.
It all depends on what happens in this Super Congress. What they did was defer the really tough negotiating issues to them -- but their plan is due in less than 3 months, and most of these cuts won't go into effect until the 2013 budget.
The White House says unemployment benefits and tax reform will be taken up by the Super Congress. It will be easier to get it passed in their plan, because Congress will have to vote the entire plan up or down, without filibuster or amendments.
But who will be the 24 members of that body, and will the Dems on it be able to do any better?