Senate Majority Harry Reid and Senate Minority Leader Mitch McConnell announced Sunday night that they had come to an agreement on a deal that would raise the federal debt limit and reduce the deficit.
In back-to-back speeches on the Senate floor, Reid (D-Nev.) called the compact an “historic, bipartisan compromise that ends this dangerous standoff,” while McConnell (R-Ky.) said there was now a framework in place to “ensure significant cuts in Washington spending.”
“Sometimes it seems our two sides disagree on almost everything. But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a worldwide depression,” Reid said.
Speaking from the White House, President Obama acknowledged that the “messy” fight over the nation’s debt and deficits has “taken far too long,” but he thanked leaders for finding “their way toward compromise” and urged Americans to continue putting pressure on lawmakers until the deal is voted out of Congress.
The agreement “will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy,” Obama said.
As the Senate leaders announced the accord, House Speaker John A. Boehner (R-Ohio) addressed his members on a conference call – briefing them on the outline of the plan.
“There’s no agreement until we’ve talked to you,” Boehner told the members, according to excerpts of the conversation released by his office.
All sides planned to meet Monday morning to go over details.
Congress has a Tuesday deadline to move legislation to Obama’s desk, or the nation loses its ability to borrow money to pay its bills.
The White House has said, however, it would approve a short-term debt-ceiling increase if the legislation needed another day or two to clear both chambers of Congress.
Leaders have been discussing a bill that would achieve $3 trillion in deficit savings while extending the nation’s borrowing capacity to 2013. It calls for the formation of a special joint committee that would recommend further cuts and changes to entitlement programs that could be voted on this fall.
But the emerging details of the framework had some Obama allies on edge. The chairman of the House Progressive Caucus, the voice of Democrats’ more liberal members, promised to oppose the deal as outlined.
“This deal trades peoples’ livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” said Rep. Raul Grijalva of Arizona. “The very wealthy will continue to receive taxpayer handouts, and corporations will keep their expensive federal giveaways. Meanwhile, millions of families unfairly lose more in this deal than they have already lost. I will not be a part of it.”
The Congressional Black Caucus called an “emergency meeting” Monday to discuss the proposal. The group’s chairman, Rep. Emanuel Cleaver (D-Mo.), called it “a sugar-coated Satan sandwich.”
Seeking to assure his party, Obama emphasized the work of the new congressional committee, which would face a Nov. 23 deadline to make its recommendations.
“In this stage, everything will be on the table,” Obama said.
Even if legislative approval is far from certain, the announcement appeared to have an immediate impact on overseas markets. Stocks rallied in Japan, Australia and South Korea as the new trading week began.
The dollar rose, gold fell and Treasury bond yields edged higher.The Tokyo market’s Nikkei-225 index was up 168 points, or 1.7%, to 10,001 in the first hour of trading Monday. In Sydney the main share index was up 1.4%; the Seoul market gained 1.5%.
Tom Petruno contributed to this report from Los Angeles.