Sources from both parties tell ABC News that the major potential roadblock in deficit negotiations– the triggers — are now essentially agreed upon. The plan is for the House to vote on this tomorrow, assuming all goes according to plan.
The agreement looks like this: if the super-committee tasked with entitlement and tax reform fails to come up with $1.5 trillion in deficit reduction that passes Congress, the “neutron bomb” goes off, — as one Democrat put it — spending cuts that will hit the Pentagon budget most deeply, as well as Medicare providers (not beneficiaries) and other programs.
If the super-committee comes up with some deficit reduction but not $1.5 trillion, the triggers would make up the difference.
So it’s a minimum $2.7 trillion deficit reduction deal.
And the debt ceiling will be raised by $2.4 trillion in two tranches: $900 billion immediately, and the debt ceiling will be raised by an additional $1.5 trillion next year – either through passage of a Balanced Budget Amendment, which is unlikely, or with Congress voting its disapproval..
Two items still being negotiated:
1) The exact ratio of Pentagon to non-Pentagon cuts in the trigger – Democrats want 50% from the Pentagon, Republicans want less;
2) Democrats want to exempt programs for the poor from the cuts.
Also Democrats say — if tax reform doesn’t happen through the super-committee, President Obama will veto any extension of Bush tax cuts when they come up at the end of 2012, further creating an incentive for the super-committee to act.
All sides hope this will be enough to convince the markets and ratings agencies that the federal government is serious about deficit reduction — in order to avoid default.
Both sides will declare victory — last week the biggest difference between the Boehner and Reid proposals was whether, as the GOP demanded, there would be another debt ceiling vote before the election. That wont happen in this deal.
But at the same time, Republicans got almost every single other item that they pushed in this process.
So now the policy has been negotiated, for the most part. But now comes the selling — the politics. And this has been a political debate more than a policy one.
It’s still unclear if House Speaker John Boehner, R-Ohio, can rally his troops to support this, though House GOPers say they should be able to get to 217 with some Democratic support.
There is less of a concern about the Senate.
Please note that this is still a fluid process, so even though this negotiation is close to final it is not done until the bill hits the floor of the House for a vote.
– Jake Tapper