Reid Backs Debt Deal; Waiting for Senate Dems to Sign On

Washington – Senator Harry Reid, the majority leader, has tentatively signed off on the budget deal being negotiated with top Republicans by the White House, moving Congress closer to taking up a measure that could pass both the House and Senate with bipartisan support and be signed by President Obama, averting a fiscal calamity.

A top aide to Mr. Reid said on Sunday evening that the majority leader was backing the plan pending approval by most Senate Democrats, who were awaiting a briefing on the details. Following a meeting with Representative Nancy Pelosi of California, the House Democratic leader, Mr. Reid also told reporters that he hoped to have a vote on the plan as early as Sunday night.

But administration and Congressional officials said Speaker John A. Boehner was trying to roll back possible cuts in Pentagon spending in a last effort to reshape the agreement, while Democrats were urging the White House to hold firm. Strong bipartisan approval in the Senate would provide the legislation with momentum headed into the House.

All afternoon, after Senate Republicans, as expected, blocked progress on a Democratic plan, Senate Democrats and House Republicans had worked feverishly with White House officials Sunday to iron out the final components of a deal to avoid imminent default, negotiating the design of a mechanism that, after an initial round of spending cuts and debt relief this year, would help force the hand of Congress when the time comes for a second round next year.

There seemed to be broad agreement that any deal reached would include at least $2.5 trillion in spending cuts over the next 10 years, of which $1.2 trillion would be approved now. But there was intense jockeying over the terms governing the next steps, including the work of a new bipartisan Congressional committee whose members would be charged with finding more deficit reductions in time for a second increase in the debt ceiling in just a few months.

Failure by that committee would trigger automatic cuts in programs beloved by Democrats and Republicans, respectively, unless Congress later this year passed a Constitutional amendment requiring balanced budgets.

Strong balance-the-budget language has been the linchpin of support for any new fiscal plan among many House Republicans, who forced their leaders to include it last week in a bill to raise the debt ceiling, but it is anathema to many Democrats in the Senate, and in any event requires two-thirds approval in each house to take effect.

The negotiators appeared to be having a hard time defining what kind of cuts would occur at the end of the year if Congress failed to act on the committee’s recommendations.

Under the framework that negotiators were discussing today, half of those cuts would come in defense spending, while the other half would be a combination of other domestic spending, like discretionary programs and farm subsidies. Cuts to Medicare would not make up more than 3 percent of the non-military cuts. While many Republicans are loath to risk such cuts to defense, some of the more Tea Party-influenced freshmen members are less concerned with that than with getting big spending cuts overall while avoiding tax increases at all costs.

And negotiators agreed that any deal would not include language that could lead to a new formula for the annual cost-of-living adjustments for Social Security beneficiaries, a change that could save more than $100 billion in the first 10 years. While many economists have long said the existing formula overstates inflation, many Democrats oppose any change that would reduce benefits from current law. Dropping the proposal from the White House-Congressional talks reflected in part the influence of Representative Nancy Pelosi, the Democratic minority leader, whose negotiating hand has been strengthened, since she will have to deliver a significant number of Democrats votes for House passage of any solution, given the likelihood that Mr. Boehner will face a significant loss of Republican votes.

Early Sunday afternoon, the Democrat-controlled Senate blocked a debt-ceiling bill offered by Senator Harry Reid of Nevada, the majority leader, 50 to 49 , well short of the 60 votes required to break a filibuster and move to final passage. After the vote, Senate Democrats prepared to caucus over the framework of the incipient agreement, and House Republicans, who had returned home to their districts, were told to prepare for a conference call this afternoon with House Speaker John A. Boehner.

Striding to his office in early afternoon, Senator McConnell said, “We are really, really close to agreement.”

Senator Dianne Feinstein, Democrat of California, said she was pleased with what she had heard about the contours of the potential agreement.

“This provides an opening to a very broad sweep of changes,” Mrs. Feinstein said. Referring to the tortuous legislative process, she said: “Sausage making is not pretty. But the sausage we have, I think, is a very different sausage from when we started.”