In it, but not of it. TPM DC

Dems, GOP Float Eye-Popping Debt Limit Compromise

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From ABC News, the key detail: "The special committee must make recommendations by late November (before Congress' Thanksgiving recess). If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This 'trigger' is designed to force action on the deficit reduction committee's recommendations by making the alternative painful to both Democrats and Republicans."

The Medicare cuts would supposedly fall on Medicare providers, not beneficiaries. The trigger would also include a vote on a Balanced Budget Amendment -- but no requirement that it be sent off to the states.

One source briefed on the negotiations confirms that the ABC story is correct "on the key points." A similar piece in National Journal suggests the Special Committee would not be allowed to reduce the deficit by raising new net tax revenue. The source disputes that notion, as does the ABC report.

On CNN's State Of The Union, McConnell sought to reassure conservatives that the deal includes no tax increases -- though did not specifically address the scope of the Special Committee. "There are no tax increases in this bill," he said. "There will be no tax increases in this proposal." Emphasis added.

Also on CNN, Sen. Chuck Schumer (D-NY) said the final trigger must include incentives that don't simply allow Republicans to draw a line in the sand over revenues. "What is the sword over the Republican?" Schumer asked.

Well it has to be equal -- the one thing we are certain of, it has to be of equal sharpness and strength. The preference would be some kind of revenues, on wealthy people, on tax loopholes that would be in that. But another alternative, possible, being discussed, no agreement has been reached, would be defense cuts of equal sharpness and magnitude to domestic cuts.

In the past, when the trigger has had significant defense cuts, it's brought the parties to the table and they've come up with a balanced agreement that had both revenues and cuts.

Obama briefed Congressional leaders about the framework late last night.

But a senior White House official urged caution. As of early Sunday morning, the official said, "major details" of the agreement were still being discussed, and the nature of the trigger described in these initial reports is incorrect.

We'll know more very soon. The idea of this sort of penalty is to constitute policy both parties agree is bad -- that way they don't simply choose to punt on a larger deficit reduction bill. The idea here is that the threat of Medicare cuts will focus Democrats and the threat of defense cuts will focus Republicans, and they'll agree to fiscal policy that includes the entitlement cuts Republicans want and tax increases Democrats want.

Republicans have insisted that the debt limit should not be raised by any more than the amount by which Congress agrees to reduce the deficit. This framework would allow Republicans to consider future cuts as "baked in" and thus to agree to raise the debt limit through 2012 -- a key Democratic demand.