Who says compromise isn’t possible any more in Washington? This thing, as I understand it, has a little something for everyone. The basic structure is Boehner’s two-tier process with the first tranche roughly matching cuts, as traditionally defined in Washington, with a $900 billion debt increase. Then, there’s the second tranche. It’s a mash of Boehner, Reid, and McConnell.
One method of triggering the second debt increase is the passage of the balanced-budget amendment (won’t happen). Another is a match of the debt increase with whatever deficit reduction a special committee recommends and Congress passes.
On the committee, it is charged with getting $1.5 trillion in deficit reduction. If it gets and Congress passes $1.2 trillion or more, Obama gets an equal increase in the debt limit, up to $1.5 trillion; in other words, if the committee comes up with more and Congress passes that, Obama still only gets $1.5 trillion. If nothing happens with the committee or it falls short, an automatic sequestration will take place to make up the shortfall, with half of it cuts in defense. Democrats wouldn’t go along with an across-the-board cut, because then Republicans wouldn’t have much incentive to go along with the committee (they presumably like across-the-boards cuts).
Republicans favorable to the deal feel as though they have three safeguards against the committee recommending tax increases and Congress going along: (1) The members appointed by Boehner and McConnell, who will presumably not be Gang of 6 types (McConnell would be wise to appoint Kyl, Sessions, and Toomey); (2) a tax increase would not get through the House and probably would not have 50 votes in the Senate; (3) the baseline dynamic mentioned earlier.
When it comes time for Obama’s request, it goes through the McConnell disapproval process.
As discussed in here the last few days, this deal is clearly inadequate to our fiscal challenges. But liberals are screaming about it. I’m surprised Reid didn’t get more. Clearly, the bottom line the White House cared about most was putting another debt-limit fight beyond the election, and even that — depending on economic conditions — could be in doubt if he only gets $1.2 trillion in the second tranche.