The penalty is $1.2 trillion over 10 years in across the board haircuts to defense, Medicare providers, the health care reform beneficiaries, and other domestic spending. Though the committee must reach agreement by mid-November, and Congress must pass their recommendations before year's end to avoid pulling the trigger, the penalty doesn't take effect until January 1, 2013, which would give Congress ample time for a mulligan.
The committee itself, co-chaired by Rep. Jeb Hensarling (R-TX), and Sen. Patty Murray (D-WA), is in its initial staffing stages. Early conversations between members and aides have begun, but real work likely won't begin until after Labor Day. The chairs have met in person to discuss the panel's operation, but have yet to establish transparency requirements or other rules for the committee.
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