The Latest Version of the Debt Ceiling/Austerity Bill

Some details are out on the debt bill that Harry Reid signed onto this afternoon. This plan apparently was worked out between the White House and Mitch McConnell–no Democrats involved. It doesn’t sound as extreme as previous versions, but we won’t know until everything plays out, I guess. Reid is hoping to hold a vote tonight so the House will have time to respond tomorrow.

Here is how the deal will work, reported by Brian Beutler:

It guarantees the debt limit will be hiked by $2.4 trillion. Immediately upon enactment of the plan, the Treasury will be granted $400 billion of new borrowing authority, after which President Obama will be allowed to extend the debt limit by $500 billion, subject to a vote of disapproval by Congress.

That initial $900 billion will be paired with $900 billion of discretionary spending cuts, first identified in a weeks-old bipartisan working group led by Vice President Joe Biden, which will be spread out over 10 years.

Obama will later be able to raise the debt limit by $1.5 trillion, again subject to a vote of disapproval by Congress.

That will be paired with the formation of a Congressional committee tasked with reducing deficits by a minimum of $1.2 trillion. That reduction can come from spending cuts, tax increases or a mixture thereof.

So McConnell has accepted the possibility of tax increases. I doubt if that is going to go over very well with Boehner and his Tea Party nutbags. The trigger is still in the bill.

If the committee fails to reach $1.2 trillion, it will trigger an automatic across the board spending cut, half from domestic spending, half from defense spending, of $1.5 trillion. The domestic cuts come from Medicare providers, but Medicaid and Social Security would be exempted. The enforcement mechanism carves out programs that help the poor and veterans as well.

Politico reports that at 7PM, John Boehner finally announced a conference call with House Republicans at 8:30, so it should be starting as I write this. Says Politico:

A quick strong Senate vote for the deal would add to the pressure on Boehner, and Reid went so far as to suggest that the Senate could even vote Sunday night: “Hope so” was his answer to reporters after meeting with Pelosi. But from the administration’s standpoint, no deal is meaningful without assurance of Republican support in the House, and that remained a big question mark going into the evening.

Boehner’s office insisted that it was simply waiting to hear back from the White House on some “bottom-line” provisions, and indeed details were still being resolved. But administration officials said privately that pro-defense House lawmakers were putting pressure on the speaker over the Pentagon’s share of reduced 2012 appropriations as well as further threatened defense cuts if the deficit-reduction targets are not met.

So there you have it, but what does it all mean? My immediate reaction to the smaller numbers and the assurances on Social Security and Medicaid is that it’s some kind of trick to get us thinking the austerity psychosis in the White House is letting up a bit. But they still have the “committee” AKA Catfood Commission II to fall back on.

I’ll update in the comments if I hear anything more. Please do likewise if you’re surfing around.