President Barack Obama and U.S. congressional leaders announced late Sunday an agreement to cut an initial $1 trillion from federal government deficit spending and more than $2 trillion over 10 years, while allowing the U.S. debt ceiling to be raised before a Tuesday deadline.
In a late night appearance in the White House briefing room, President Obama presented a broad outline of the agreement that he noted was still subject to crucial votes in the Senate and House of Representatives.
The first stage of the plan would cut about $1 trillion over 10 years, while preserving what the president called job-creating investments in education and research. The amount of spending cut over a decade would exceed $2 trillion.
Saying the process of reaching the agreement had been difficult and that it is not the one he would have preferred, Obama turned to a major aspect of the deal - creation of a bipartisan committee that would make recommendations on substantial additional cuts that Congress would then vote on.
"In this stage, everything will be on the table," he said. "To hold us all accountable for making these reforms, tough cuts that both parties would find objectionable would automatically go into effect, if we don't act."
Recommendations of the committee would be made by November, and the proposals would be put to the U.S. Congress for an up or down vote.
The "ultimate solution" to the deficit problem, Obama said, must be balanced, adding that the wealthiest Americans should have to give up tax breaks and deductions. He said "modest adjustments" will be needed in government entitlement programs such as Medicare to ensure their stability - a position he has maintained throughout the debt and deficit negotiations.
Obama said the deal at hand allows the country to avoid default and clears the way for a "balanced plan" before the end of the year.
"Most importantly, it will allow us to avoid default and end the crisis that Washington imposed on the rest of America," he said. "It ensures also that we will not face the same kind of crisis in 6 months or 8 months or 12 months. And it will begin to lift the cloud of debt and the cloud uncertainty that hangs over our economy."
Senate Democratic leader Harry Reid and Republican leader Mitch McConnell spoke on Capitol Hill, acknowledging that the deal was a difficult compromise for their members, but one that would avert default.
"I know this agreement won't make every Republican happy. It certainly won't make every Democrat happy either," said Reid. "Both parties gave more ground than they wanted to and neither side got as much as they hoped. But that is the essence of compromise."
"We can assure the American people tonight that the United States of America will not, for the first time in our history, default on its obligations," said McConnell.
The House of Representatives and the Senate will need to vote on the legislation to get the agreement, in the form of a bill, to the president's desk for signature. Mr. Obama urged all lawmakers to vote for it.
The proposal still faces obstacles among Republicans and Democrats. House Speaker John Boehner briefed members of his Republican caucus late Sunday. House Democratic leader Nancy Pelosi is expected to do the same Monday.
On Sunday, lawmakers representing the liberal progressive faction of President Obama's Democratic Party expressed concern that the deal includes too many concessions to Republicans.
The head of a group of 74 liberal Democrats, Representative Raul Grijalva, said the agreement fails to "strike a balance" between more cuts for working Americans and "a fairer contribution from millionaires and corporations."
Members of the Congressional Black Caucus also are criticizing the deal, and plan to hold a news conference on Monday morning to spell out their disagreements with it.
Among Republicans, there were concerns about proposed additional cuts to defense spending. Members of the conservative and libertarian Tea Party movement questioned details of the agreement.