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Defense Cuts Hold Up Debt Ceiling Deal

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WASHINGTON -- Multiple Democratic sources tell The Huffington Post that the level of defense cuts that would take place should a bipartisan super-committee not agree to a second round of spending cuts is one of the last remaining sticking points holding up an agreement to raise the debt ceiling.

As the deal currently stands, the debt ceiling would be increased in three separate phases. The ceiling would initially be raised by $400 billion, followed by another $500 billion hike later this year. Both of these would be subject to a vote of disapproval by Congress. (Obama could veto that disapproval, after which Congress would have to override his veto.) The third increase of the debt ceiling would be for an additional $1.5 trillion. That raise is projected to allow the nation to borrow through the 2012 election and would be tied to roughly matching savings pinpointed by a specially appointed and empowered congressional committee.

The problem is that it's not a given that the so-called super Congress will yield any legislative victories, despite the streamlined congressional process to see their recommendations passed into law. So to ensure follow-through, the current deal would lay out policies that would be enacted if the committee didn't succeed in passing the required savings -- policies that would prove both painful and compelling to those voting on the committee's suggestions.

Republicans settled on a mix of spending cuts and entitlement reforms. Democrats initially wanted tax or revenue increases to serve as the trigger, but when Republicans objected, they turned to defense cuts.

By Saturday night, the contours of the deal were more-or-less set. If the special committee failed to deliver a deficit-cutting package, there would be $1.2 trillion in cuts: half from defense spending, half from non-defense spending, including money spent on Medicare suppliers. Social Security and low-income programs such as Medicaid would be exempted.

That outline seemed to placate GOP leadership. But when they took the suggestion to fellow lawmakers on Sunday morning, they encountered pushback. Republicans wanted the ratio changed so that it would be lighter on the defense spending. This more than anything else is what's holding up the vote -- though there are other reasons, sources said. As NBC's Chuck Todd noted in Sunday night's telecast:

Everybody is waiting for John Boehner to sign off on this deal. ... It's this issue of how deep would the defense cuts be, not just in the deal itself in the first part, but also in the size of it, in the so-called trigger. You heard Chuck Schumer talk about having this sharp-edged sword hanging over the head because you're not going to have taxes hanging over the head of republicans to compel this super committee to work, the other solution that Vice President Biden and Mitch McConnell came up with was the threat of pretty deep defense cuts. Well, now house Republicans are balking and there's a lot of hand-wringing over this.

There is something telling about Republicans trying to lower the cumulative effect of the super committee trigger: It suggests they don't think the super committee will produce results. And because of that, lawmakers are doing their best to soften the fallback plan.

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