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Whispers Grow Of A Debt Deal

LINDA WERTHEIMER, host: This is WEEKEND EDITION from NPR News. I'm Linda Wertheimer.

This morning, there are fresh rumors of a deal in the works on the debt ceiling. After days of extremely frustrating stalemate in Congress, negotiations began again yesterday between Vice President Joe Biden and Senate Republican Leader Mitch McConnell, the two leaders who framed the deal last December that extended tax cuts and jobless benefits.

Today, Biden and McConnell and other Democratic and Republican leaders will continue trying to break through on a new plan to raise the debt ceiling before the Treasury Department runs out of cash this coming week. Officials have said the United States would be in danger of a first-ever default on debt and other obligations as soon as Tuesday.

Joining us to talk about where things stand is NPR congressional correspondent Andrea Seabrook. Good morning, Andrea.

ANDREA SEABROOK: Good morning, Linda.

WERTHEIMER: Now, if this deal is real, can you tell us anything about the shape of it? We raise the debt ceiling some now and more later?

SEABROOK: Basically, yes. I mean the most important thing to remember about this deal is that it takes the crisis over the debt ceiling and changes it into a crisis over across the board budget cuts later. So it would be a two-step process. Raise the debt ceiling now, cut spending by about $1 trillion. Then before Congress raises the debt ceiling a second time, a special committee who would fast-track cuts to the House and Senate floors another, roughly $2 billion in - excuse me - $2 trillion in cuts in order to raise the debt ceiling.

WERTHEIMER: Now, what happens if that special committee does not come up with something that the House and Senate can accept?

SEABROOK: Well, then there would be automatic across-the-board cuts by some percentage point, it to both defense spending, and Medicare and Social Security - those social programs. It sort of takes, you know, this whole crisis is somewhat artificial. The debt limit was created by Congress, right? So Republicans were just using it as a lever to ratchet down spending. They see that as their mandate, after being elected in the House majority.

SEABROOK: So with this deal it kind of changes the fulcrum of that process, from being the debt ceiling to being across the board spending cuts that would affect sacred programs to both Republicans and Democrats. The point being that instead of putting the whole economy sort of in hostage to a deal, it just puts more cuts to a deal - something that Republicans and Democrats also don't want to necessarily.

WERTHEIMER: Now, we have been talking about the possibility that would have reruns of this whole argument again, maybe on a slightly different subject, in an election year. Does the deal get us through the end of 2012? Or does it happen in 2012?

SEABROOK: It would get us, as far as I understand it - and this deal is still in the works - it would get us through the end of 2012 but just barely. And that would only be in the case of the second raiser of the debt ceiling. And, you know, anything can happen between now and the final deal. Anything could happen between now and the second time the debt ceiling is raised.

WERTHEIMER: Now, we were expecting a vote in the wee hours of the morning. Now that's been moved to one o'clock. Will that vote be a significant - will we know at that point whether there is or there isn't a deal?

SEABROOK: Harry Reid has said he may postpone that vote, as well, in order to let this deal work its way with the Republican leaders and the Democratic leaders, and the White House.

WERTHEIMER: NPR congressional correspondent Andrea Seabrook. Thank you very much, Andrea.

SEABROOK: You're welcome. Transcript provided by NPR, Copyright NPR.