ABC News has learned the framework of a two-step plan to increase the debt limit that House Speaker John Boehner is presenting to the Republican rank and file this afternoon at a closed-door conference meeting.
According to multiple senior Republican aides familiar with the negotiations, Boehner is expected to outline a two-step approach that would cut and cap discretionary spending to generate $1.2 trillion savings over 10 years and increase the debt limit by less than $1 trillion. The plan would also create a joint committee on deficit reduction to come up with a second wave of deficit reduction by the end of this year.
"Republicans have put forward a responsible, common-sense proposal that meets our obligations to the American people and preserves the full faith and credit of the United States. This plan is far from perfect, but it adheres to our principles of ensuring that spending cuts are greater than any debt hike and it includes no tax increases. Importantly, it reflects the principles of ‘Cut, Cap, and Balance,'" Boehner, R-Ohio, said in a statement. "Time is running short and it would be irresponsible for the President to veto this common-sense plan and run the risk of default. I would encourage the Senate to pass this plan and the President to sign it.”
After the first round of cuts and caps, the House Republican plan would create a joint committee on deficit reduction with a broad legislative mandate to reduce the deficit by at least an additional $1.8 trillion over 10 years.
The committee’s deficit savings could be achieved either through spending cuts or tax increases, or a combination of both — whatever can pass out of the bipartisan committee and also pass through both Houses of Congress, according to aides. A simple majority on the committee would have until Nov. 23 to provide its recommendations to Congress, while both chambers would be required to hold an up or down vote immune from legislative delaying tactics - no filibusters and no amendments – by Dec. 23.
If the committee’s plan is approved, then the president would be authorized to request a debt limit increase of up to $1.6 trillion. The actual increase would be worked out in the future but would be slightly less than the total amount of deficit reduction in the committee’s plan. Congress could still have the opportunity to disown the president’s request by passing a joint resolution of disapproval, but the president could veto the disapproval and get his debt limit increase anyway.
The proposed committee would include 12 members – six Republicans and six Democrats – appointed by leaders of both parties in both chambers of Congress, with two chairs appointed by the House speaker and Senate majority leader.
The Republican’s plan also ensures that spending cuts are larger than any debt ceiling increase and implements spending caps to restrain future spending while guaranteeing a vote on a Balanced Budget Amendment before the end of the year – although the amendment would not be required to pass both Houses of Congress.
The sources also say that the first phase of the plan does not have any tax increases, although the special committee on deficit reduction could approve increased revenue as part of its second phase – similar to how the Gang of Six included increased revenue in its plan.
The GOP’s plan is competing with an alternative that Senate Majority Leader Harry Reid is drafting to put before the senate this week.
Sunday evening Reid, D-Nev., introduced an 11th hour proposal to cut $2.7 trillion over 10 years without raising revenues and still increasing the debt limit beyond the end of 2012 and the coming general election.
Republican aides hope that their proposal attracts Senate Republicans to support the House plan and squelch Reid’s aspirations to send a Democratic alternative to the House.