August 1, 2011 8:55 PM

A summary of the debt ceiling compromise

By
John Nolen
Topics
Economy ,
Congress
Evening News Online, 07.31.11

Senate Majority Leader Harry Reid, left, and House Speaker John Boehner

(Credit: CBS News)

The House on Monday approved a compromise deal to raise the debt limit in a 269-161. The bill, which was brokered Sunday night in last-minute negotiations between the White House and congressional leaders, passed with the support of 174 Republicans and 95 Democrats.

Below is a summary of the major provisions of the debt ceiling deal reached by congressional leaders and the White House on Sunday , passed the House of Representatives on Monday evening and headed to the Senate for debate and a vote on Tuesday.

Debt ceiling deal clears House; Senate next
Boehner: I got 98 percent of what I wanted
CBSNews.com special report: America's debt battle

Highlights:

  • The compromise allows debt ceiling increase by as much as $2.4 trillion dollars in total. Included is an immediate increase of $400 billion dollars. President Obama would be permitted to request another $500 billion increase in the coming months, which Congress could vote to disallow by a veto proof two-thirds margin. A further increase of between $1.2 trillion and $1.5 trillion would be available after a special committee identifies matching levels of additional spending cuts.

  • The agreement calls for cuts of more than $900 billion over ten years in spending from programs, agencies and day-to-day spending. It would include security-related and non-security-related cuts. According to the Congressional Budget Office, "discretionary" spending would be decreased by $21 billion in 2012 and $42 billion in 2013.

  • The agreement creates a 12-person House and Senate special committee to identify further spending cuts. The committee must complete its work by Thanksgiving - November 23 - and Congress must hold an up or down vote on the committee recommendations by December 23. The committee could overhaul the tax code or find savings in benefit programs like Medicaid, Medicare or Social Security. Congress could not modify the committee's recommendation.

  • Should the special committee deadlock or should Congress reject the committee's recommendations, then automatic across the board spending cuts of at least $1.2 trillion would go into effect.

  • The agreement requires that the House of Representatives and the Senate vote on a Balanced Budget Amendment to the Constitution, although its passage is not guaranteed.

  • The deal also includes changes to Pell Grants and student loan programs. Pell Grants will receive a $17 billion increase for low-income college students, which will be financed by the elimination of subsidized student loans for most graduate students.

  • The compromise does not include any immediate revenue additions or tax increases.

Add a Comment See all 64 Comments
by buckn August 3, 2011 9:06 AM EDT
I have to disagree with lg144. To pin this mes exclusively on the Republicans is a gross (no pun intended, '144') error. There is plenty of blame to be shared by the Democrats. It seems that the entire Congress is on the take.
As far as reducing spending; I think that pulling out of other country's wars and affairs would be a good place to start. We simply cannot afford the luxury of being the saviors of the world.
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by ronssmoss August 2, 2011 3:38 PM EDT
Seems clear that both parties now belong to the major corporations, as does Obama (Republicans always did), which is understandable given the Supreme Court's Citizens United case, which allows unlimited political spending by corporations. So long as this is the law, I think free elections are not possible in the US. Advertising works. This is why we do not allow tobacco advertising aimed at children. To save our Republic, we need a ban on all political advertising. Let voters who are interested READ about the issues.

www.humansfirst.org
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by ronssmoss August 2, 2011 3:37 PM EDT
Seems clear that both parties now belong to the major corporations, as does Obama (Republicans always did), which is understandable given the Supreme Court's Citizens United case, which allows unlimited political spending by corporations. So long as this is the law, I think free elections are not possible in the US. Advertising works. This is why we do not allow tobacco advertising aimed at children. To save our Republic, we need a ban on all political advertising. Let voters who are interested READ about the issues.

www.humansfirst.org
Reply to this comment
by Truth_Tracker August 2, 2011 10:40 AM EDT
The Super Wealthy got everything they wanted, no questions asked, with the "TARP-Banks-Wall Street-Auto Industry" bailouts. The Super Wealthy got a humongous Welfare Check last December when the Bush Tax Breaks for the Super Wealthy was renewed. And NOW, we are told, they are getting everything they wanted yet again, namely, a complete exemption from having to share in the onerous burden of reducing the deficit, because there's no potential here for a roll-back of their Bush Tax Breaks (Welfare Benefits) for the wealthy.

The U.S. media refuses to even deem this to be significant, probably because THEY benefit tremendously from those "Welfare for the Wealthy" hand-outs and they surreptitiously silence the issue by shifting focus to the "Default Crisis" - with the curt remark "something for everyone to hate," and with the errant national anthem "pass anything - anything is better than default." Well there's nothing in this plan for the Super Wealthy to "hate." The super wealthy are the only ones being rigorously represented in Congress, in the White House or in the media.
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by ronssmoss August 2, 2011 3:36 PM EDT
Seems clear that both parties now belong to the major corporations, as does Obama (Republicans always did), which is understandable given the Supreme Court's Citizens United case, which allows unlimited political spending by corporations. So long as this is the law, I think free elections are not possible in the US. Advertising works. This is why we do not allow tobacco advertising aimed at children. To save our Republic, we need a ban on all political advertising. Let voters who are interested READ about the issues.
by KnowerseekerReturns August 2, 2011 10:19 AM EDT
"The deal also includes changes to Pell Grants and student loan programs. Pell Grants will receive a $17 billion increase for low-income college students, which will be financed by the elimination of subsidized student loans for most graduate students." -- Well, I hope that the Pell Grant increase is used to subsidize lower-middle class students now instead of giving more poor students access to college. I was one of those poor students who completed my bachelor's using Pell Grants, and I never had a problem getting funds (even though I'm white) *because* I was a straight-A student. We don't need a bunch of drop-out poor students in college, but the lower-middle class students could use a hand up, just like I got. I've met many who were/are too "rich" to get a Pell Grant but too poor to do anything but sell their soul to a loan. Those are the kids that need the help.
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by rightbehind August 2, 2011 9:17 AM EDT
The democrats would have been better off to grow a spine. I'll be glad when the compromiser n chief is gone. He doesn't stand for anything.
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by KnowerseekerReturns August 2, 2011 10:24 AM EDT
The debt ceiling *had* to be raised. The "compromiser in chief" did what he had to do to get that done. If you want to see better, vote out the Republicans next cycle.
by agnesdeo August 2, 2011 8:36 AM EDT
Our Wisconsin Senator Johnson commented "Unfortunately, President Obama and his Democrat allies in the Senate refuse to acknowledge this danger by agreeing to serious reforms. Instead, the Budget Control Act will only reduce spending in the first year by $21 billion (0.6 percent of the total budget, and less than 1 percent of the increase in the debt ceiling). The total amount of deficit reduction is $1.6 trillion less than the rating agencies indicated would be required to prevent a downgrade in the U.S. debt rating
In other words, it's a very small step in the right direction of our nation and we attempt to stop it from it's bankrupt by Prez. Obama's socialistic agenda.
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by skeezix06 August 2, 2011 9:02 AM EDT
Wisconsin? Say, aren't the voters in the process of mounting a electoral rebellion against the republicans in that state? I seem to remember something of the sort....
by agnesdeo August 2, 2011 10:54 AM EDT
skeezix06 I would encourage you to go to our Governor Walker's website and see for yourself the great progress that is happening within our beloved State with all of Walkers progressive changes.
We continue to go forward despite our liberal socialistic democrats attempts to stop our movement.
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by bmallen3 August 2, 2011 7:44 AM EDT
Arthanyel- Without a balanced budget amendment, politicians will spend every cent they take in buying votes. Politicians are all about power, and they strive to enslave as many as possible to government handouts so they can control their votes. Democrats can't let people get ahead because they will vote Republican. The amendment is in place at the sate level and works 100% of the time. MEDICARE has $70T in unfunded liabilities in its current form so there is no amount of tax that can keep it functioning. Social Security, MEDICARE and OBAMACARE must all be changed if they are to exist in the future. Lastly, we tax earnings not wealth, so all of you screaming for a tax on the wealthy is nonsense. If I am broke and in debt but land a good job paying $200K/yr, Obama wants to raise my taxes.
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by skeezix06 August 2, 2011 8:00 AM EDT
Orwell is alive and doin' fine, I see.
by AOCGUY August 2, 2011 9:46 AM EDT
Let's correct some intentional misconceptions.

1. Medicare and Social Security are insurance plans that had the money involuntarily taken from employees and employers been placed into a fenced account, there would be no problem with those programs solvency. Do we need to tweak those plans given the large number of baby boomers now entering retirement? Yea probably so but the plans are solid, it is just that Congress has been stealing from those plans for years. And make no mistake about it, those funds inviluntarily taken from employees and employers are the property of those that that they were taken from.

2. Now listen carefully, THERE IS NO SUCH THING AS OBAMACARE. The Patient Protection and Affordable Care Act was approved by Congress and signed by Pres Pbama, but it bore no resemblance to the reforms President Obama and the Democrats in Congress desired. It was in fact the first of many capitulations to GOP intransigence that the Pres and Democrats in Congress have made. Quite frankly, should Pres Obama not be reelected it will be more because he regualrly acts like he is standing firm on principle only to back down to the demands of the right.
by skeezix06 August 2, 2011 7:33 AM EDT
One sided compromises are usually called a cave-in....
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by RobAla August 2, 2011 7:27 AM EDT
In 2012, this will have to be revisited in a serious attempt to handle the massive overspending by the federal government. At what point will the federal government live within it's means? I am not even talking about paying down the staggering $14.4 trillion national debt; I am just asking when will Washington become responsible adults and stop the hemorrhaging?

This can not continue. The CBO, the GAO, and President Obama's Deficit Commission all said that what we are doing is "UNSUSTAINABLE". It is absolutely unwise to even consider additional taxes on American businesses and taxpayers. Washington's actions are maintaining a horrible 9% unemployment. Still we have some misguided people advocating that we punish American businesses more with additional taxes, money that would be sent to the bloated and wasteful federal government - instead of hiring people. We have some who advocate (whether out of jealousy and hatred of those who are more successful or whether out of stupidity) increasing taxes on the people who are left in this country that still have discretionary income to spend on goods and services provided by businesses (the entities that create jobs).

If you punish businesses with higher taxes, they will not have the money to hire workers. If you tax the more wealthy Americans, they will not have that income to support the businesses that hire people. We can not continue to feed an insatiable federal government, at the expense of jobs.

You hear some say, "we have lower taxes and we still have 9% unemployment". What do think we would have if we increased taxes? We hear some say, "businesses have profits and they are not hiring workers". The idiotic health care law is about to impose massive expenses on businesses, and this businesses are preparing to deal with that expense. The actions of this administration has crippled businesses with increased regulations and increases in expenses, and you can't expect crippled businesses to do much about hiring people. The bad policies of President Obama and progressives in the Senate are damaging the nation. We have to reverse course and apply practical policy.
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by bmallen3 August 2, 2011 7:48 AM EDT
I am trying to figure out how to protect my savings from the upcoming devaluation of the dollar. This budget deal will add another $8T to the deficit bringing the total to $22T, an unacceptable level. We will not be able to pay the interest on this debt. It is time to move all savings to a different investment, like gold or Swiss Franks. I have started companies and employed hundreds of people, but I would never take that risk again given the irresponsible actions of the government.
by ajvw August 2, 2011 1:22 PM EDT
@bmallen3 - I think it's too late to buy gold at 1620+ per ounce. The Austrailian Dollar and the Swiss Francs seems to be your best option in my humble opinion.
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