Sources on the Hill: Tentative deal is reached

Several sources on Capitol Hill are reporting that tentative deal has been reached on cutting spending and raising the debt ceiling between the White House and GOP leaders in Congress.

ABC News reports:

Democratic and Republican Congressional sources involved in the negotiations tell ABC News that a tentative agreement has been reached on the framework of a deal that would give the President a debt ceiling increase of up to $2.4 trillion and guarantee an equal amount of deficit reduction over the next 10 years.

The details are still being worked out, and a senior White House aide tells ABC News, "talks continue but there is no deal to report."

Congressional leaders plan to brief their members on the framework tomorrow. The reaction from both parties' rank-and-file will determine whether this tentative deal becomes a final deal.

Here, according to Democratic and Republican sources, are the key elements:

* A debt ceiling increase of up to $2.1 to $2.4 trillion (depending on the size of the spending cuts agreed to in the final deal).
* They have now agreed to spending cuts of roughly $1.2 trillion over 10 years.
* The formation of a special Congressional committee to recommend further deficit reduction of up to $1.6 trillion (whatever it takes to add up to the total of the debt ceiling increase). This deficit reduction could take the form of spending cuts, tax increases or both.
* The special committee must make recommendations by late November (before Congress' Thanksgiving recess).
* If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This "trigger" is designed to force action on the deficit reduction committee's recommendations by making the alternative painful to both Democrats and Republicans.
* A vote, in both the House and Senate, on a balanced budget amendment.

Bottom line: tax increases not off the table, and actually appear very likely if you read between the lines. There are so many landmines strewn about the process that one would think they are built into the design so that the additional $1.6 trillion in cuts would never come to pass. Or if they got that far, most of the deficit reduction would be in tax increases and not spending cuts.

It's tricksy, that's for sure. But it will probably pass because too many lawmakers are terrified of what might happen to the economy if it doesn't.

And Obama better not crow too loudly about his "great achievement." Moody's is saying they're going to lower our credit rating anyway because - obviously - the plan is smoke and mirrors and not a serious effort to get a handle on the deficit or debt.

You apparently can't fool Mother Nature - or sovereign rating experts.

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