Washington--President Barack Obama and congressional leaders reached the compromise that will raise the debt ceiling by up to $2.1 trillion and prevented the government from defaulting. Congress will consider the deal beginning today that is expected to reduce federal deficits by $2.5 trillion over a decade.
The agreement is expected to lift the debt ceiling through the end of 2012. The plan calls for an immediate reduction in the deficit of $917 billion over 10 years. The proposal calls for both the House and the Senate to vote on a proposed balanced budget amendment to the Constitution.
In addition, a special joint committee will be formed to find ways to reduce the deficit by an additional $1.8 trillion by 2021.Tax increases are not part of the plan, however the joint committee could consider options for revenue increases, such as eliminating tax breaks or not renewing the Bush-era tax cuts for high earners.