There is no bigger news today than the deal on the debt ceiling.
Ending a perilous stalemate, President Barack Obama and congressional leaders announced historic agreement Sunday night on emergency legislation to avert the nation’s first-ever financial default, Associated Press reports.
The dramatic resolution lifted a cloud that had threatened the still-fragile economic recovery at home — and it instantly powered a rise in financial markets overseas, AP writes.
The agreement would slice at least $2.4 trillion from federal spending over a decade, AP reports. The Treasury’s authority to borrow would be extended beyond the 2012 elections, a key objective for Obama, though the president had to give up his insistence on raising taxes on wealthy Americans to reduce deficits.
The plan calls for spending cuts and increased borrowing authority for the Treasury in two stages, AP reports.
In the first, passage of the legislation would trigger $1.2 trillion in spending cuts over a decade as well as a $900 billion increase in the government’s borrowing authority. The spending cuts would come from hundreds of federal programs across the face of government.
In the second stage, a newly created joint committee of Congress would be charged with recommending $1.5 trillion in deficit reductions by the end of November and put to a vote in Congress by year’s end, AP writes. The cuts could come from benefit programs such as Medicare, Social Security of Medicaid as well as from an overhaul of the tax code.
The committee proposals could trigger a debt limit increase of as much as $1.5 trillion, if approved by Congress. But if they do not materialize, automatic spending cuts would be applied across government to trim spending by $1.2 trillion, AP writes.
Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare, AP reports.
Also in the AJC:
In other media:
- Henry Unger, The Biz Beat
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