IT’S A DEAL! Obama, Congressional Leaders Announce Deal To Avoid Default

July 31, 2011 4:48 pm

We’ll know in a few hours whether the major and controversial deal to raise the national debt limit and advance major cuts to government services, announced by President Obama and Congressional leaders on Sunday evening, will make its way smoothly to law.

After an intense day of direct and shuttle negotiations, and after a tentative agreement nearly fell apart, Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) took to the floor of the Senate late Sunday to announce an agreement in principle.

“The compromise we have agreed to is remarkable for a number of reasons, not only because of what it does, but because of what it prevents,” Reid said.“This is an important moment for our country,” McConnell noted in response. “I can say with a high degree of confidence that there is a framework in place to assure a significant degree of cuts to Washington spending.”

Both men announced the intent to meet with their caucuses Monday morning, to sell the plan, and round up votes for what will have to be rapid legislative action if both chambers are to pass the plan before the country’s borrowing authority expires late Tuesday.

President Obama discussed the framework in a public statement at the White House Sunday evening, and urged members of both parties to support the plan. He also criticized Congress for touching off this crisis, and for being unable to arrive at a single grand bargain to improve the country’s fiscal situation (with spending cuts and tax increases) and raise the debt limit as well.

“Is this the deal I would have preferred? No,” Obama said. “But this compromise does make a serious down payment on the deficit reduction we need.”

The announcement came just as House Speaker John Boehner (R-OH) hosted a conference call with his own, unruly caucus, to sell them on the same plan. Passing this bill will be a heavier lift in that caucus, where scores of Democrats and Republicans are expected to defect.

To sell it to his members, Boehner laid out the deal in a Powerpoint presentation that describes the agreement’s many similarities to his own debt limit plan.

3 7-31-11 Debt Framework Boehner

Boehner also notes that a soon-to-be convened fiscal committee will use “current law” as a baseline thus will be unlikely to “raise taxes” above it — a sleight-of-hand that’s unlikely to fly with many conservatives.

Nevertheless, Boehner declared victory.

“Since Day One of this Congress, we’ve gone toe-to-toe with the Obama Administration and the Democrat-controlled Senate on behalf of our people we were sent here to represent,” Boehner said to his members, according to remarks provided by a GOP source.

Remember how this all started: the White House demanded a “clean” debt limit hike with no spending cuts and reforms attached. We stuck together, and frankly made them give up on that.

Then they shifted to demanding a “balanced” approach – equal parts spending cuts and tax hikes. With this framework, they’ve given up on that, too….

Now listen, this isn’t the greatest deal in the world. But it shows how much we’ve changed the terms of the debate in this town.

This post has been updated.

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