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

4. A STRONG ENFORCEMENT MECHANISM TO MAKE ALL SIDES COME TOGETHER

–The Deal Includes An Automatic Sequester to Ensure That At Least
$1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the
Discretionary Caps: The deal includes an automatic sequester on certain
spending programs to ensure thatbetween the Committee and the
triggerwe at least put in place an additional $1.2 trillion in deficit
reduction by 2013.

–Consistent With Past Practice, Sequester Would Be Divided Equally
Between Defense and Non-Defense Programs and Exempt Social Security,
Medicaid, and Low-Income Programs: Consistent with the bipartisan
precedents established in the 1980s and 1990s, the sequester would be
divided equally between defense and non-defense program, and it would
exempt Social Security, Medicaid, unemployment insurance, programs for
low-income families, and civilian and military retirement. Likewise, any
cuts to Medicare would be capped and limited to the provider side.

–Sequester Would Provide a Strong Incentive for Both Sides to Come
to the Table: If the fiscal committee took no action, the deal would
automatically add nearly $500 billion in defense cuts on top of cuts
already made, and, at the same time, it would cut critical programs like
infrastructure or education. That outcome would be unacceptable to many
Republicans and Democrats alike creating pressure for a bipartisan
agreement without requiring the threat of a default with unthinkable
consequences for our economy.

5. A BALANCED DEAL CONSISTENT WITH THE PRESIDENTS COMMITMENT
TO SHARED SACRIFICE

–The Deal Sets the Stage for Balanced Deficit Reduction,
Consistent with the President’s Values: The deal is designed to achieve
balanced deficit reduction, consistent with the values the President
articulated in his April Fiscal Framework. The discretionary savings are
spread between both domestic and defense spending. And the President
will demand that the Committee pursue a balanced deficit reduction
package, where any entitlement reforms are coupled with revenue-raising
tax reform that asks for the most fortunate Americans to sacrifice.

–The Enforcement Mechanism Complements the Forcing Event Already
In Law — the Expiration of the Bush Tax Cuts — To Create Pressure for
a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date
that the spending sequester would go into effect. These two events
together will force balanced deficit reduction. Absent a balanced deal,
it would enable the President to use his veto pen to ensure nearly $1
trillion in additional deficit reduction by not extending the
high-income tax cuts.

–In Securing this Bipartisan Deal, the President Rejected
Proposals that Would Have Placed the Sole Burden of Deficit Reduction on
Low-Income or Middle-Class Families: The President stood firmly against
proposals that would have placed the sole burden of deficit reduction on
lower-income and middle-class families. This includes not only proposals
in the House Republican Budget that would have undermined the core
commitments of Medicare to our seniors and forced tens of millions of
low-income Americans to go without health insurance, but also
enforcement mechanisms that would have forced automatic cuts to
low-income programs. The enforcement mechanism in the deal exempts
Social Security, Medicaid, Medicare benefits, unemployment insurance,
programs for low-income families, and civilian and military retirement.

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

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