Update: Here are the details:
NO TAX HIKES
Same as House-passed bill, the framework includes no tax hikes.Requires baseline to be current law, effectively making it impossible for Joint Committee to increase taxes.
CUTS THAT EXCEED THE DEBT HIKE
Same as House-passed bill, framework includes spending cuts that exceed the amount of the increased debt authority granted to POTUS.Would cut & cap discretionary spending immediately, saving $917B over 10 years (certified by CBO) & raise the debt ceiling by less — $900B — to approximately February.
Before debt ceiling can be raised, Congress and the president must enact spending cuts of a larger amount first.
BALANCED BUDGET AMENDMENT
Same as House-passed bill, framework requires both House & Senate to vote on a BBA after Oct. 1, 2011 but before the end of year.Similar to House-passed bill, framework authorizes POTUS to request second tranche of debt limit increase of $1.5T if:
Joint Committee cuts spending by greater amount than the requested debt limit hike, OR A Balanced Budget Amendment is sent to the states.
Creates incentive for previous opponents of a BBA to now support it.
CUTS THAT EXCEED THE DEBT HIKE
Same as House-passed bill, framework includes spending cuts that exceed the amount of the increased debt authority granted to POTUS.Would cut & cap discretionary spending immediately, saving $917B over 10 years (certified by CBO) & raise the debt ceiling by less — $900B — to approximately February.
Before debt ceiling can be raised, Congress and the president must enact spending cuts of a larger amount first.
CAPS TO CONTROL FUTURE SPENDING
As in House-passed bill, framework imposes spending caps that would set clear limits on future spending & serve as barrier against gov’t expansion while economy grows.Failure to remain below these caps triggers automatic across-the-board cuts (“sequestration”). Same mechanism used in 1997 Balanced Budget Agreement.
ENTITLEMENT REFORMS & SAVINGS
Same as House-passed bill, framework creates a 12-member Joint Committee required to report legislation by November 23, 2011 that would produce a proposal to reduce the deficit by at least $1.5T over 10 years.Each chamber would consider Joint Committee proposal on an up-or-down basis without any amendments by December 23, 2011.
If Joint Committee’s proposal is enacted OR if a Balanced Budget Amendment is sent to the states, POTUS would be authorized to request a debt limit increase of $1.5T.
ENTITLEMENT REFORMS & SAVINGS
Sets up a new sequestration process to cut spending across-the-board — and ensure that any debt limit increase is met with greater spending cuts — IF Joint Committee fails to achieve at least $1.2T in deficit reduction.If this happens, POTUS may request up to $1.2T for a debt limit increase, and if granted, then across-the- board spending cuts would result that would equal the difference between $1.2T and the deficit reduction enacted as a result of Joint Committee.
Across-the-board spending cuts would apply to FYs 2013-2021, and apply to both mandatory & discretionary programs.
Total reductions would be equally split between defense and non-defense programs. Across-the-board cuts would also apply to Medicare. Other programs, including Social Security, Medicaid, veterans, and civil & military pay, would be exempt.
Sequestration process is designed to guarantee that Congress acts on the Joint Committee’s legislation to cut spending.
Update II:
Update III: For what it’s worth.
