WH, Reid, McConnell reach $3T debt deal on Super-Senate SS Reform w/ automatic austerity measures

If the Social Security and Medicare cuts fail on an up-or-down vote with no amendments in an arrangement that Obama (its author) claims "You want them to say, if (Democrats refuse to pass the Social Security privatization), there will be a very tough degree of pain that will take place (automatically)."

http://www.cnn.com/2011/POLITICS/07/31/debt.talks/index.html?hpt=hp_t1

According to McConnell and other congressional and administration officials interviewed Sunday, as well as various sources who spoke to CNN on condition of not being identified, the deal under discussion would be a two-step process intended to bring as much as $3 trillion in deficit reduction over 10 years.

Some sources provided differing targets for the total, ranging from $2.4 trillion up to $3 trillion.

A first step would include about $1 trillion in spending cuts while raising the debt ceiling about the same amount. The proposal also would set up a special committee of Democratic and Republican legislators from both chambers of Congress to recommend additional deficit reduction steps -- including tax reform as well as reforms to popular entitlement programs such as Medicare and Social Security.

The committee's recommendations would be put to a vote by Congress, without any amendments, by the end of the year. If Congress fails to pass the package, a so-called "trigger" mechanism would enact automatic spending cuts. Either way -- with the package passed by Congress or the trigger of automatic cuts -- a second increase in the debt ceiling would occur, but with an accompanying congressional vote of disapproval.

In addition, the agreement would require both chambers of Congress to vote on a balanced budget amendment to the U.S. Constitution. Such an amendment would require two-thirds majorities in both chambers to pass, followed by ratification by 38 states -- a process likely to take years.

WH budget chief says no new revenue

Schumer told CNN that a main sticking point still under discussion was the trigger mechanism of automatic spending cuts in case Congress fails to enact the special committee's recommendations.

According to sources, cuts in the trigger mechanism would be across-the-board, including Medicare and defense spending, to present an unpalatable alternative for both parties in the event Congress fails to pass the special committee's proposal.

"You want to make it hard for them just to walk away and wash their hands," Gene Sperling, the director of Obama's National Economic Council, told CNN. "You want them to say, if nothing happens, there will be a very tough degree of pain that will take place."

Preliminary reaction showed sensitivity to that pain. Sen. Carl Levin, D-Michigan, said the automatic spending cuts under a trigger mechanism should not affect Medicare benefits for senior citizens.

(i.e. is already caving to the Obama plan, so long as the automatic austerity measures do not affect his voters)

"The way we understand it's going to be worded is it does not affect beneficiaries. It would affect providers and insurance companies," Levin said. "That should be the case, because if it hits beneficiaries, you're going to lose lots of Democratic votes."

The 1st 1 trillion is cuts only, but the super commission is to consider everything. Sen. Graham says the revenues will be a part of the committee and for that reason he will vote against the bill.

Hell if only one Republican were on it there would be no revenues. Which side does all the compromising? If you can answer that you will see how this will turn out. Also Dems like Max Baucus will be on it I am sure and those types agree with Republicans anyways.

this is worse than BushCo-and I didn't think that would be possible.

This isn't really the deal, is it?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1628111

Also... Carl Levin's limp-wristed statement about losing Democratic voters reminds me of
Boss Tweed's quote from the end of Gangs of New York where they're burying rioters --
"we're burying a lot of good voters tonight."

Twitter fans!! :cry:

I meant to indicate that the base is not happy.

Because this is the plan that Reid offered for a vote on Sunday.

Doesn't matter, Boehner's House already rejected Reid's plan the other day.

I mean, a super-commission whose cuts to entitlements must pass without amendment, or else automatic austerity measures will be imposed with cuts to all programs which the Obama administration describes as a poison pill?

So, why is he now all for it?

Why would McConnell agree to a plan that he already blocked from even being discussed in the Senate on Sunday?

Reid couldn't even break the cloture vote to get the friggin' bill to even be discussed, let alone voted on.

Boehnor's House already voted against Reid's plan, and this is essentially the same thing as Reid's plan.
So, why would Boehner cave in now?

They've all flip-flopped within just 48 hours!!

They are saying something now that is totally opposite of what they said yesterday and on Saturday -- that Reid's plan would die in the House.
Boehnor took a pre-emptive vote on it on Friday or Saturday and the Tea Party faction joined with the other Republicans to kill Reid's plan before it had even been discussed in the Senate by the Senators!!

Both Larry O'Donnell on the one hand, and Ron Paul on the other, suggested that.

MSNBC commentators on Scarborough laughed at Larry O'Donnell for being "so cynical"... and then asked him to engage Grover Norquist in a left vs. right exchange of "expert" views.

In truth, the reality is much more cynical than Larry O'Donnell's theory.

You see, O'Donnell thought Obama was playing chess, and that he wanted the Republicans to vote down Reid's proposal so he could present them with a "clean debt cieling" which Republicans could then cover their asses to vote for at the last minute. The whole debate thus being theater for the benefit of activists on the left and right, allowing Obama to PRETEND to support massive cuts that would not actually happen because the Reid bill would fail due to Republicans voting against cuts Obama would pretend to be willing to make. This, other reporters labeled cynical.

In truth, Obama was playing "three-dimensional chess" and the reality was much more cynical -- it was all kabuki theater as O'Donnell predicted, but the actual outcome sought by both parties was the Reid bill after all -- the one that contains poisonous provisions for activists on both the left and right -- and it was all a front to empower Reid's center-right caucus to enact a Reagan-style bill!

If somehow we can be hornswoggled into believing that any cuts during a recession are good, this is the only way that Obama can even think of calling it a good deal.

From the White House press release, it appears that Obama is actually using the prospect of an alternative sequester bill -- in which Medicare and Social Security are NOT "reformed" and defense spending is cut INSTEAD, and the Bush Tax Cuts are NOT extended -- as elements of a poison pill austerity measure, which Obama states in his press release would be "unacceptable to both parties":

4. A STRONG ENFORCEMENT MECHANISM TO MAKE ALL SIDES COME TOGETHER

* The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.
* Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.
* Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table: If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education. That outcome would be unacceptable to many Republicans and Democrats alike – creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy.

5. A BALANCED DEAL CONSISTENT WITH THE PRESIDENT’S COMMITMENT TO SHARED SACRIFICE

* The Deal Sets the Stage for Balanced Deficit Reduction, Consistent with the President’s Values: The deal is designed to achieve balanced deficit reduction, consistent with the values the President articulated in his April Fiscal Framework. The discretionary savings are spread between both domestic and defense spending. And the President will demand that the Committee pursue a balanced deficit reduction package, where any entitlement reforms are coupled with revenue-raising tax reform that asks for the most fortunate Americans to sacrifice.
* The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.

Not enough people saw this article, it seems.

so says Ezra Klein.

Sam

Why defense cuts would be an unpalatable alternative to reworking Social Security, I dunno, but that appears to be the view of the White House since they seem confident the trigger will not pass --

more specifically, they will trumpet that it is a failure for the American people if the Commission report fails and the trigger does pass, as much as if the default deadline passed.