So what’s the deal? Broadly speaking, the agreement increases the government’s borrowing authority for several months beyond the Oct. 17 debt ceiling deadline and reopens the government until early January, while designating a bipartisan committee to hammer out a longer-term budget deal. Says Bloomberg News: “The emerging agreement would suspend the debt limit through Feb. 7, 2014, fund the government through Jan. 15 and require a House-Senate budget conference by Dec. 15.”
How is this different than the last major possible deal discussed late last week? The House’s old proposal would have raised the debt ceiling for a shorter period of time (six weeks instead of almost four months), and wouldn’t have ended the shutdown, both of which Democrats said were a no-go. There is one similarity so far: Bloomberg’s Richard Rubin reports that a Senate aide said the deal will prohibit the Treasury Department from using extraordinary measures to extend the debt ceiling beyond Feb. 7, making that a hard deadline. That gives Republicans a concession to tout.
What could go wrong? To become law, the deal needs to get out of the Senate, which, as my colleague Joshua Green reported this morning, means facing down the considerable leverage held by Republican Senator Ted Cruz of Texas. Then House Speaker John Boehner (R-Ohio) would need to decide if he’ll force a vote and offer the bill as-is, or if he’ll allow the House to change it, which could delay the process that’s already butting up against the Oct. 17 default deadline. Representative Paul Ryan (R-Wisc.) has been trying to build consensus among Republicans that a short-term deal with the potential to lead to long-term solutions is a win—this deal puts that to the test to see if the Tea Party wing of the party agrees.
What about all those new deadlines? If it becomes law, the deal punts negotiations to a bipartisan supercommittee. If that sounds familiar, that’s because we’ve had about, oh, a zillion similar commissions in the past few years; all failed. As Politico points out, the January budget deadline also coincides with the date when $21 billion in additional sequester spending cuts are scheduled to kick in, setting up a major battle early next year. None of this is pretty, but it’s probably far more palatable than what would happen if the country were to default on its debts.