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Obama Heralds End to Hard-Fought Debt Negotiations Obama Heralds End to Hard-Fought Debt Negotiations

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Obama Heralds End to Hard-Fought Debt Negotiations


President Obama leaves after making a statement on debt crisis at the White House in Washington, D.C., on July 31, 2011.(JEWEL SAMAD/AFP/Getty Images)

President Obama announced on Sunday night a hard-fought deal with congressional leaders to slash the federal deficit by at least $2.4 trillion over 10 years and lift the nation's $14.3 trillion debt-ceiling limit to avoid a catastrophic and unprecedented default. The pact includes no tax increases sought by the president.

With the nation's reputation and credit rating hanging in the balance, Obama said bitterly divided U.S. leaders had finally struck a deal to "end the crisis Washington imposed on all of America."

"We're moving forward together," said House Majority Leader Harry Reid, D-Nev. House Speaker John Boehner, R-Ohio, declared it a victory for his party. "Now listen," he told his GOP conference on a members-only call, "this isn't the greatest deal in the world. But it shows how much we've changed the terms of the debate in this town."

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As crafted, the compromise provides for a $900 billion increase in the debt ceiling by the end of the year and nearly $1 trillion in spending cuts over 10 years by establishing spending caps. A newly created joint committee of to-be-named lawmakers would seek further deficit reduction measures in the orbit of $1.5 trillion by November, with the goal of enacting the recommendations by December. If the committee and Congress fail to act, across-the-board spending cuts would be triggered to achieve those savings—half of the cuts from defense spending, the other half from non-security discretionary spending. The enforcement mechanism was included as an incentive for lawmakers to act. Either way, a second debt ceiling increase early next year will occur, subject to a vote on a resolution of disapproval by Congress.

Obama cautioned that the rank-and-file members of both parties still needed to approve the deal hammered by leaders just two days before the nation was set to face default. "We're not done yet," he said.

Of that, there is no doubt.

The most fervent conservatives and liberals in Congress are sure to find problems with the compromise package, but leadership aides in both parties said late Sunday that they were cautiously optimistic the bill would prevail. Some Republican lawmakers have balked at any efforts to lift the debt limit, and some of Obama's Democratic allies accused him of caving to the GOP and embracing cuts in federal programs important to the poor and elderly. However, the deal exempts Social Security, Medicaid, and veterans’ benefits from across-the-board cuts, and potential cuts to Medicare would come down on the provider side and not affect beneficiaries, negotiators said.

House Minority Leader Nancy Pelosi, D-Calif., said she needed to review the details and acknowledged that House Democrats could find fault with the compromise. "We all might not be able to support it--or none of us may be able to support it,” Pelosi told reporters Sunday. House Democrats are scheduled to huddle on Monday morning to review the bill. Leaders of the Democrats’ Progressive and Congressional Black Caucuses already declared opposition to the bill and spoke of it in draconian terms. “This deal trades peoples’ livelihoods for the votes of a few unappeasable right-wing radicals,” said Rep. Raul Grijalva, D-Ariz., a leading liberal voice.

According to lawmakers on the call hosted by the speaker to outline the deal, the conference’s reception was mostly warm. "You scored an eagle on the 18th hole to win the U.S. Open,” Rep. Don Manzullo, R-Ill., told Boehner. The Ohio Republican has exerted tremendous political will to get his rank-and-file behind the compromise, but it was not expected to pass on GOP votes alone. Republicans currently have 240 House seats. One lawmaker estimated 175 GOP lawmakers would vote for the bill, which would require the support of at least 50 Democrats to get it over the goal line.

Another House Republican interviewed by National Journal, who requested anonymity to speak frankly, said he will oppose the bill but expected the deal to pass the House. The House Republican Conference is expected to meet Monday as well.


“I’m not going to shoot holes in this thing publicly,” said the lawmaker. “You’re going to get the Democratic votes, because they’re going to realize they don’t want to put the president in a pickle.”


Passage in the Senate appeared more certain, as Reid and McConnell are both expected to deliver the votes necessary in the upper chamber.

Some Republicans were sure to balk at the balanced budget amendment language in the current framework because it waters down House-passed language to condition a second debt ceiling increase on sending a constitutional amendment to the states. As currently drafted, the agreement says Congress must vote in the House and Senate this year on a balanced budget amendment. In addition, next year's debt limit increase is tied to deficit reduction from the special committee or sending a balanced budget amendment to the states for ratification. This language would appear to give Democrats a choice - cut spending themselves or send the balanced budget amendment.

One of the final snags in the deal dealt with the magnitude of defense cuts ordered under the plan's deficit-reduction roadmap for fiscal years 2012 and 2013. Democrats sought to ensure tougher defense cuts, while Republicans preferred a freeze on current defense spending. Democrats feared it would translate to deeper cuts to domestic programs. As negotiated, the framework imposes a “firewall” to allow for the spending reductions to be split between security and non-security defense spending.

A firm timetable for final passage was expected on Monday after leadership in both chambers confers with their members. The Senate is likely to move first on passage.

A Senate Democratic aide said Reid, based on conversations with McConnell, is confident of reaching a unanimous consent deal to allow a vote early as Monday, with House action to follow either late Monday or Tuesday—the day the U.S. was scheduled to begin default.

Dan Friedman, Billy House, and Megan Scully contributed contributed to this article.