Reid has signoff off on a new plan hashed out by Obama, McConnell and other GOP leaders. | AP Photos Reid signs off on debt deal as negotiators get close

The White House and Republican leaders closed in Sunday on a debt ceiling deal giving President Barack Obama greater certainty in managing the Treasury’s borrowing needs while making a joint commitment to major deficit reductions without any explicit concessions by the GOP on new tax revenues.

Late in the afternoon, a statement from Senate Majority Leader Harry Reid (D-Nev.) said: “Senator Reid has signed off on the debt-ceiling agreement pending caucus approval.”


Opening the Senate at noon, Reid had proceeded with an attempt to cut off debate on an alternative package he put forward. That motion failed 50-49, as expected, but Reid kept his options open to force a second cloture vote if he so chose. Timing was crucial with financial markets reopening Monday, one day before the threat of default.

While both sides stress that nothing is final yet, the contours of the would-be agreement suggest a more practical approach by Republicans, led by Senate Minority Leader Mitch McConnell, to achieve many of the party’s goals without pushing Obama and the nation into default.

Quoting a figure of $3 trillion though declining to provide details, McConnell confirmed Sunday morning on CNN’s “State of the Union” that both sides were “very close” to a deal. “We’ve made dramatic progress in that direction,” he told Gloria Borger.

Sen. Chuck Schumer (D-N.Y.), speaking on the same CNN show, also said a deal was close: “If there’s a word that would, right here, that would sum up the mood, it would be relief. … Default is far less of a possibility now than it was a day ago.”

But David Plouffe, Obama’s senior adviser, said on ABC’s “This Week” that it was not clear a sufficient number of House Republicans were on board to get the measure passed, a sentiment echoed by Sen. Lindsey Graham (R-S.C.) on the same show. For his part, Plouffe quoted a figure of $4 trillion in discussing the package.

The proposal builds on elements of a House-passed bill that would save $917 billion over the next 10 years and raise the ceiling by $900 billion in two increments, which should carry the government through the end of this year.

In the interim, a new joint committee would be charged with coming up with an estimated $1.5 trillion in additional deficit reduction, less than targets set in the House measure but still judged sufficient to match Treasury’s remaining borrowing needs to get though the 2012 election year.

Obama is not guaranteed that he will get the full combined $2.4 trillion debt increase that has been proposed, but he would, nevertheless, avoid the recurring threat of default next winter if the committee were to fail to meet its target.

Instead, the proposal calls for severe across-the-board cuts as the action-forcing device — cuts affecting Democratic domestic priorities, including Medicare, but also about 50 percent would come from defense spending, which is a major priority for many Republicans.

The goal with the action-forcing device is to give both parties an incentive to avoid a deadlock in the committee, and the administration would also have a major stake since success would make it easier to manage its borrowing. But the threat of defense cuts was so severe that it risked a backlash from House Republicans, accounting for some of the continued uncertainty Sunday.

Instead, the proposal calls for severe across-the-board cuts as the action-forcing device — cuts affecting Democratic domestic priorities, including Medicare, but also about 50 percent from defense spending, which is a major priority for many Republicans.

The goal with the action-forcing device is to give both parties an incentive to avoid a deadlock in the committee, and the administration will also have a major stake since success will make it easier to manage its borrowing. But the severity of the threatened defense cut is such that it risked a backlash from House Republicans, accounting for some of the continued uncertaiuty Sunday.

This is a more incremental approach than the almost “do-or0die” style of the House bill, which explicitly denies Obama the power to seek any debt ceiling increase if the joint committee doesn’t achieve at least $1.6 trillion in deficit reduction.

This was the single largest complaint the president had about the House demands which all but guaranteed renewed strife and instability amid the holiday season in six months. Obama’s fears were compounded last week, when House Speaker John Boehner moved further to the right by adding language making any future increase contingent on Congress first adopting an unspecified balanced-budget amendment to the Constitution.

The deal now is expected to ensure up-or-down votes on such an amendment but no guarantee of the outcome.

McConnell is walking a difficult path in the negotiations but he has been in regular contact with Boehner, who so far seems to be keeping himself one step removed from the White House. Vice President Joe Biden has been the chief contact with McConnell thus far, and Reid Saturday night said he had been encouraged by the White House to see what will come from these efforts.

“There are many elements to be finalized, and there is still a distance to go before any arrangement can be completed,” Reid said. “But I believe we should give everyone as much room as possible to do their work.”

Boehner has echoed McConnell’s confidence saying he believes that “we are going to be able to come to some sort of agreement.” But the speaker has had less contact with the White House thus far, which may explain some of Plouffe’s concern still about the Republican vote in the event of a deal.

Sunday afternoon, a message from Boehner to his rank-and-file members characterized the talks as “moving in the right direction but serious issues remain.”

“No agreement will be filed members have a chance to weight in,” he promised and along these lines, the speaker said he anticipated a conference call for House Republicans later Sunday afternoon.

Glenn Thrush contributed to this report.