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President Obama announced Sunday night that leaders of both parties in both chambers have reached an agreement on a debt-reduction deal that will “lift the cloud of uncertainty that hangs over our economy.”

According to the president, the deal means an immediate cut of $1 trillion over a 10-year period, followed by the creation of a committee to come up with additional cuts worth $1.5 trillion to be voted on by the end of the year.

Each chamber will nominate lawmakers to the committee to report back in the fall. Tax hikes are not part of the package and a pledge for a Balanced Budget Amendment vote is.

Obama said everything will be on the table and both parties will find some of the cuts objectionable.

The Senate adjourned Sunday night without a vote on a debt reduction deal, but Senate Democratic Leader Harry Reid said that the parties are going to have to give ground and compromise so the country doesn’t default.

“I am relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic, bipartisan compromise that ends this dangerous standoff. The compromise we have agreed to is remarkable not only because of what it does, but because of what it prevents: a first-ever default on the full faith and credit of the United States,” Reid said.

Reid and Senate Republican Leader Mitch McConnell will both present the agreement to their caucuses on Monday morning. Several objections are expected, including from Republican defense hawks who don’t want the military gutted and from the Congressional Black Caucus, which called the deal a “sugar-coated Satan sandwich.”

House Speaker John Boehner told his Republican caucus on a Sunday night conference call that the deal isn’t done yet.

“The press has been filled with reports all day about an agreement. There’s no agreement until we’ve talked to you,” he said.

But Boehner of Ohio said the deal does not violate GOP principles. “We got 98 percent of what we wanted,” he said adding gthat the framework cuts more spending than it raises the debt limit. It also caps future spending to limits in the growth of government.

“It would also guarantee the American people the vote they have been denied in both chambers on a balanced budget amendment, while creating, I think, some new incentives for past opponents of a BBA to support it,” Boehner said.

According to a Power Point presentation provided by Reid’s office, if the committee’s recommendations are not approved by the end of the year, a “trigger” in the proposal would automatically enact across-the-board cuts — with roughly half of the cuts coming from defense.

The 12-member committee, composed of six Republicans and six Democrats, three from each party and each chamber, will report the legislation by Nov. 23. The vote, to take place by Dec. 23, would be an up-or-down vote with no amendments allowed.

The trigger would be enacted for across-the-board cuts if the joint committee doesn’t reach at least $1.2 trillion in deficit reduction. If that happens, Obama would be allowed to request a $1.2 trillion debt increase and Congress would have to disapprove it. Across the board cuts would also apply to Medicare, but other programs like Social Security, Medicaid, veterans benefits and military pay would be off-limits.


via Obama Announces Debt-Reduction Deal Approved by Senate, House Leaders – FoxNews.com.

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