Reid signs off on bipartisan debt deal

Reid signs off on bipartisan debt deal

Senate Majority Leader Harry ReidHarry ReidChris Murphy’s profile rises with gun tragedies Republicans are headed for a disappointing end to their year in power Obama's HHS secretary could testify in Menendez trial MORE (D-Nev.) has signed off on a tentative bipartisan deal forged between President Obama and GOP leaders to raise the debt limit.

But the emerging deal may be imperiled by last-minute reluctance from House Speaker John BoehnerJohn Andrew Boehner‘Lone wolf’ characterization of mass murderers is the epitome of white privilege Pelosi urges Ryan to create select committee on gun violence Ex-congressman Michael Grimm formally announces bid for old seat MORE (R-Ohio), who worries the proposal cuts too much from future Pentagon budgets.

After meeting with House Democratic Leader Nancy Pelosi (Calif.) for longer than an hour and a half on Sunday, Reid announced his support for the deal.

Now he and the other members of his leadership team have to sell it to members of their caucus. Many of them are upset the deal does not raise additional tax revenues to reduce the deficit.

“Sen. Reid has signed off on the debt-ceiling agreement pending caucus approval,” said Adam Jentleson, a spokesman for Reid.

Congressional sources familiar with the outlines of the deal say it would cut the deficit by about $2.8 trillion and raise the debt limit by a similar amount. The deal includes $1.2 trillion in spending cuts up front and creates a select bicameral committee to find another $1.6 trillion in savings later in the 112th Congress.

The tentative deal hangs on so-called triggers intended to give lawmakers strong incentive to implement the second round of deficit reduction.

A person familiar with the deal said Obama and Senate Republican Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGun proposal picks up GOP support Children’s health-care bill faces new obstacles Dems see Trump as potential ally on gun reform MORE (Ky.) agreed that if the select committee deadlocked or Congress failed to pass its recommendations, it would automatically trigger $1.2 trillion in across-the-board spending cuts.

The president and McConnell agreed to divide the automatic spending cuts evenly between defense and nondefense programs, according to the source. Obama also persuaded GOP leaders to set up firewalls to ensure a significant amount of the spending cuts would take place in fiscal years 2012 and 2013.

A second congressional source confirmed this account.

However, the tentative deal may be in jeopardy because John BoehnerJohn Andrew Boehner‘Lone wolf’ characterization of mass murderers is the epitome of white privilege Pelosi urges Ryan to create select committee on gun violence Ex-congressman Michael Grimm formally announces bid for old seat MORE as of Sunday evening was trying to walk back the proposed defense cuts, according to sources.

One congressional source said Boehner wants to shrink the defense spending cuts slated for 2012 and 2013.

A spokesman for Boehner did not respond to a request for comment.

An aide familiar with the deal said if the special bicameral committee fails to produce a viable deficit-reduction package, the automatic spending cuts triggered as a penalty would include cuts to Medicare. But the aide said Medicare beneficiaries would not feel a direct impact. Instead, healthcare providers and insurance companies would see lower payments.

Reid announced his support for the emerging bipartisan deal after the Senate voted largely along party lines Sunday afternoon to block a proposal he drafted to raise the debt limit by $2.4 trillion.

The vote to end a GOP filibuster failed 50-49, with only Sen. Scott Brown, a centrist Republican from Massachusetts, joining Democrats to advance the measure.

Sen. Joe ManchinJoseph (Joe) ManchinOvernight Energy: EPA aims to work more closely with industry Overnight Finance: Lawmakers grill Equifax chief over hack | Wells Fargo CEO defends bank's progress | Trump jokes Puerto Rico threw budget 'out of whack' | Mortgage tax fight tests industry clout Lawmakers try again on miners’ pension bill MORE (D-W.Va.), Sen. Ben Nelson (D-Neb.) and Sen. Bernie SandersBernard (Bernie) SandersChris Murphy’s profile rises with gun tragedies Clip shows Larry David and Bernie Sanders reacting after discovering they're related For now, Trump dossier creates more questions than answers MORE (I-Vt.) voted against Reid's plan, as did Reid himself in a procedural move that allows him to bring it back to the floor.

Reid had told colleagues shortly after noon that he was cautiously optimistic about the negotiations between Republican leaders and the White House.

"We are close to an agreement with Republican leaders," he said. “[A]fter speaking to Republican leader Mitch McConnell (R-Ky.) this morning, we are cautiously optimists.”

Reid and other Democratic leaders traveled to the other side of the Capitol on Sunday afternoon to confer with House Democratic leaders about the prospective deal.

When he emerged from the meeting shortly after 4:35 p.m. Reid said he hoped to vote on it Sunday evening.

But first he must convene a meeting of the Senate Democratic caucus to explain the deal and convince his colleagues to support it. While many Democrats are angry it does not raise taxes, they are afraid that opposing it could lead to a national default next week.

An aide said Democratic leaders are waiting on Boehner to endorse the proposal before unveiling it to the Senate Democratic caucus.

If Boehner finally agrees to the deal, Reid is expected to use a message from the House as the legislative vehicle to pass the deal through the upper chamber.

But doing so would still require the Senate to spend Monday, Tuesday and part of Wednesday processing it unless every senator agrees to truncate the timeline. If a conservative senator drags out the proceedings, Congress will not make the Aug. 2 deadline set by Treasury Secretary Timothy Geithner.

Senate conservatives say they don't have plans to delay consideration of a possible bipartisan debt-ceiling agreement.

Leaders from both parties though will face a fight to convince lawmakers to vote for the compromise proposal.  Rep. Raul Grijalva (D-Ariz.), the co-chairman of the Congressional Progressive Caucus, rejected the plan, calling it a “cure as bad as the disease.”

Senate Democratic caucus members from the left and center of the political spectrum have also voiced their displeasure with the emerging deal.

“I cannot support legislation like the Reid proposal which balances the budget on the backs of struggling Americans while not requiring one penny of sacrifice from the wealthiest people in our country. That is not only grotesquely immoral, it is bad economic policy,” said Sanders, who caucuses with Senate Democrats, in a statement explaining his opposition to Reid’s bill.

Sen. Joe Lieberman (Conn.), another Independent in the Democratic caucus, balked at the prospect of steep defense cuts if the special committee set up by the deal deadlocks over future recommendations to reduce the deficit.

Lieberman’s spokesman, Marshall Wittmann, said his boss “strongly believes that protecting the security of the American people is the first responsibility of American government, and that means that any cuts to defense must be fair, limited, and mindful of the fact that we live in a very dangerous world.” 

“For these reasons, Senator Lieberman is very concerned about rumors that the debt agreement now being negotiated will disproportionately cut defense spending and result in unacceptably high risk to our national security,” Wittmann added.

House Democratic leaders have approached the deal cautiously.

Rep. Chris Van Hollen (D-Md.) leaving a House Democratic meeting strongly suggested Democrats are waiting for House Republicans to endorse the deal before they play their hand.

"We are still continuing to look at the details. It's our understanding that there's no sign-off yet by the Republican leadership in the House," Van Hollen said.

-- Mike Lillis contributed to this report.

This story was posted at 5:22 p.m. and has been updated.