WASHINGTON (MNI) – The following was issued Sunday night by the
White House after President Obama confirmed a tentative agreement to
raise the debt limit:

BIPARTISAN DEBT DEAL: A WIN FOR THE ECONOMY AND BUDGET DISCIPLINE

The debt deal announced today is a victory for bipartisan
compromise, for the economy and for the American people. The agreement:

–Removes the cloud of uncertainty over our economy at this
critical time, by ensuring that no one will be able to use the threat of
the nation’s first default now, or in only a few months, for political
gain;

–Locks in a down payment on significant deficit reduction, with
savings from both domestic and Pentagon spending, and is designed to
protect crucial investments like aid for college students;

–Establishes a bipartisan process to seek a balanced approach to
larger deficit reduction through entitlement and tax reform;

–Deploys an enforcement mechanism that gives all sides an
incentive to reach bipartisan compromise on historic deficit reduction,
while protecting Social Security, Medicare beneficiaries and low-income
programs;

–Stays true to the President’s commitment to shared sacrifice by
preventing the middle class, seniors and those who are most vulnerable
from shouldering the burden of deficit reduction. The President did not
agree to any entitlement reforms outside of the context of a bipartisan
committee process where tax reform will be on the table and the
President will insist on shared sacrifice from the most well-off and
those with the most indefensible tax breaks.

Mechanics of the Debt Deal

–Immediately enacted 10-year discretionary spending caps
generating nearly $1 trillion in deficit reduction; balanced between
defense and non-defense spending.

–President authorized to increase the debt limit by at least $2.1
trillion, eliminating the need for further increases until 2013.

–Bipartisan committee process tasked with identifying an
additional $1.5 trillion in deficit reduction, including from
entitlement and tax reform. Committee is required to report legislation
by November 23, 2011, which receives fast-track protections. Congress is
required to vote on Committee recommendations by December 23, 2011.

–Enforcement mechanism established to force all parties —
Republican and Democrat — to agree to balanced deficit reduction. If
Committee fails, enforcement mechanism will trigger spending reductions
beginning in 2013 — split 50/50 between domestic and defense spending.
Enforcement protects Social Security, Medicare beneficiaries, and
low-income programs from any cuts.

1. REMOVING UNCERTAINTY TO SUPPORT THE AMERICAN ECONOMY

–Deal Removes Cloud of Uncertainty Until 2013, Eliminating Key
Headwind on the Economy: Independent analysts, economists, and ratings
agencies have all made clear that a short-term debt limit increase would
create unacceptable economic uncertainty by risking default again within
only a matter of months and as S&P stated, increase the chance of a
downgrade. By ensuring a debt limit increase of at least $2.1 trillion,
this deal removes the specter of default, providing important certainty
to our economy at a fragile moment.

–Mechanism to Ensure Further Deficit Reduction is Designed to
Phase-In Beginning in 2013 to Avoid Harming the Recovery: The deal
includes a mechanism to ensure additional deficit reduction, consistent
with the economic recovery. The enforcement mechanism would not be made
effective until 2013, avoiding any immediate contraction that could harm
the recovery. And savings from the down payment will be enacted over 10
years, consistent with supporting the economic recovery.

2. A DOWNPAYMENT ON DEFICIT REDUCTION BY LOCKING IN HISTORIC
SPENDING DISCIPLINE BALANCED BETWEEN DOMESTIC AND PENTAGON SPENDING

–More than $900 Billion in Savings over 10 Years By Capping
Discretionary Spending: The deal includes caps on discretionary spending
that will produce more than $900 billion in savings over the next 10
years compared to the CBO March baseline, even as it protects core
investments from deep and economically damaging cuts.

–Includes Savings of $350 Billion from the Base Defense Budget
the First Defense Cut Since the 1990s: The deal puts us on track to cut
$350 billion from the defense budget over 10 years. These reductions
will be implemented based on the outcome of a review of our missions,
roles, and capabilities that will reflect the President’s commitment to
protecting our national security.

–Reduces Domestic Discretionary Spending to the Lowest Level Since
Eisenhower: These discretionary caps will put us on track to reduce
non-defense discretionary spending to its lowest level since Dwight
Eisenhower was President.

–Includes Funding to Protect the President’s Historic Investment
in Pell Grants: Since taking office, the President has increased the
maximum Pell award by $819 to a maximum award $5,550, helping over 9
million students pay for college tuition bills. The deal provides
specific protection in the discretionary budget to ensure that the there
will be sufficient funding for the President’s historic investment in
Pell Grants without undermining other critical investments.

3. ESTABLISHING A BIPARTISAN PROCESS TO ACHIEVE $1.5 TRILLION
IN ADDITIONAL BALANCED DEFICIT REDUCTION BY THE END OF 2011

–The Deal Locks in a Process to Enact $1.5 Trillion in Additional
Deficit Reduction Through a Bipartisan, Bicameral Congressional
Committee: The deal creates a bipartisan, bicameral Congressional
Committee that is charged with enacting $1.5 trillion in additional
deficit reduction by the end of the year. This Committee will work
without the looming specter of default, ensuring time to carefully
consider essential reforms without the disruption and brinksmanship of
the past few months.

–This Committee is Empowered Beyond Previous Bipartisan Attempts
at Deficit Reduction: Any recommendation of the Committee would be given
fast-track privilege in the House and Senate, assuring it of an up or
down vote and preventing some from using procedural gimmicks to block
action.

–To Meet This Target, the Committee Will Consider Responsible
Entitlement and Tax Reform. This means putting all the priorities of
both parties on the table including both entitlement reform and
revenue-raising tax reform.

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** Market News Internationa Washington Bureau: 202-371-2121 **

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