After a weekend of failed votes by the House and Senate on different debt ceiling proposals, President Obama on Sunday evening announced an agreement with Congressional leaders on a plan to raise the debt ceiling. The measure would raise the debt ceiling in two steps lasting until 2013 and cut federal spending by $2.4 trillion.
"The first part of this agreement will cut about $1 trillion in spending over the next 10 years; cuts that both parties had agreed to early on in this process," President Obama said during the briefing. "The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President, but at a level that still allows us to make job-creating investments in things like education and research. We also made sure that these cuts wouldn't happen so abruptly that they'd be a drag on a fragile economy."
The plan also calls for a special joint committee that would recommend further cuts including changes to Medicare and Social Security. Those changes would have to be voted on by the House and Senate this fall. The bill provides for automatic across-the-board cuts if Congress should fail to act. The plan could come up for a vote in the House and Senate this week.
President Obama said the agreement wasn't the deal he would have preferred, but that this compromise does make a serious down payment on the deficit reduction needed, and gives each party a strong incentive to get a balanced plan done before the end of the year.
Meanwhile, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., say they back the plan. On the other side of the hill House Speaker John Boehner, R-Ohio, placed a conference call to GOP members trying to make the case for the plan to his rank-and-file.