"We all may not be able to support it or none of us may be able to support it," Pelosi said, indicating Democrats would want to study the plan.The Demicrates Must Act As If There Really Worried About The Catastrphy Theyve Cause.They Know Vary Well That It Will Take 1 year,For Everyday There In Office To Repare The Damage Theyve Done To This Country.The Likely Hood Of This Bill Passing,Is Unlikely.
Should it pass both houses, the compromise legislation stood to close out one of the nastiest partisan political fights to engulf the American government in recent memory.
Reid had said he was "cautiously optimistic," while McConnell said that negotiators were "very close." But as the day wore on and legislators continued crisis sessions in the capitol, politicians on the extremes of both parties lambasted the deal and threatened to try to block an agreement even with the deadline for a U.S. default ticking down to midnight Tuesday.
Without legislation in place by then, the Treasury will not be able to pay all its bills, raising the threat of a default that administration officials say could inflict catastrophic damage on the economy.
If approved, though, a compromise would presumably preserve America's sterling credit rating, reassure investors in financial markets across the globe and possibly reverse the losses that spread across Wall Street in recent days as the threat of a default grew.
The broadest outlines of the emerging plan, a deal being worked out in negotiations involving McConnell and Vice President Joe Biden, would raise the federal debt limit in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.
Big cuts in government spending would be phased in over a decade. Thousands of programs — the Park Service, Internal Revenue Service and Labor Department accounts among them — could be trimmed to levels last seen years ago.
No benefit cuts were envisioned for the Social Security pension system or Medicare, the federal program that provides health care payments to the elderly. But other programs would be scoured for savings. Taxes would be unlikely to rise.
Officials familiar with the negotiations said that McConnell had been in frequent contact with Biden, who has played an influential role across months of negotiations.
The talks were proceeding toward a two-step system for raising the debt limit and cutting spending.
The first step would take place immediately, raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade.
That would be followed by creation of a new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit, which would be needed by early next year.
If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed balanced-budget constitutional amendment.
If that failed to pass, automatic spending cuts totaling $1.2 trillion would automatically take effect, and the debt limit would rise by an identical amount.
The emerging deal could mark a classic compromise, a triumph of divided government that would let both Obama and Republicans claim they had achieved their objectives.
As the president demanded, the deal would allow the debt limit to rise by enough to tide the Treasury over until after the 2012 elections.
But barring a change, it appeared Obama's proposal to extend the current payroll tax holiday beyond the end of 2011 would not be included, nor would his call for extended unemployment benefits for victims of the recession.