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Updated: 10:45 p.m.
President Barack Obama announced Sunday evening that after weeks of failed attempts, partisan fights and market trepidation, he and Congressional leaders had reached a deal to avert government default and reduce the deficit by $3 trillion over the next 10 years.
The White House and top lawmakers agreed to a two-step approach to reaching their savings target. The package’s significant guaranteed spending cuts and lack of immediate tax increases appeared to give Republicans most of what they were seeking, but GOP leaders did back off on their insistence that it raise the debt limit in increments. The immediate increase of about $2.4 trillion would last the nation through the 2012 elections, which had been one of Obama's top demands.
“Is this the deal I would have preferred? No,” Obama said in remarks from the White House briefing room, but it will “allow us to avoid default and end the crisis Washington imposed on the rest of America.”
Just because the principals have agreed, however, does not mean the battle to extend America’s borrowing capacity and to strike a deficit reduction deal is over. Even Obama conceded, “We’re not done yet,” issuing a call from the podium to Washington’s rank-and-file lawmakers for their support, even if they, too, are displeased with portions of the agreement.
On a conference call with his caucus that began mere minutes before Obama spoke, Speaker John Boehner (R-Ohio) sold the deal as a win for Republicans and proof of their influence and their adherence to their principles.
“Since day one of this Congress, we’ve gone toe to toe with the Obama administration and the Democrat-controlled Senate on behalf of our people we were sent here to represent,” Boehner told his Conference, according to his office. “There is nothing in this framework that violates our principles. It’s all spending cuts. The White House bid to raise taxes has been shut down. And as I vowed back in May — when everyone thought I was crazy for saying it — every dollar of debt limit increase will be matched by more than a dollar of spending cuts. And in doing this, we’ve stopping a job-killing national default that none of us wanted.”
At nearly the same time, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) took to the floor to announce the compromise and to express confidence that the government would not default on its loans.
“Today, I’m relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic bipartisan compromise that ends this dangerous standoff,” Reid said. “The compromise we have agreed to is remarkable for a number of reasons, not only because of what it does but because of what it prevents: a first-ever default on the full faith and credit of the United States.”
The tone on the floor was a serious shift from just 24 hours prior, when the two leaders sparred intensely over the closeness of a deal and their involvement in making one happen. Reid and McConnell smiled and shook hands Sunday night, knowing they both were driving forces in sealing a deal.