20110727 national debt clock 54
The National Debt Clock, a billboard-size digital display showing the increasing U.S. debt, near an office of the Internal Revenue Service on Sixth Avenue in New York. - 

Bob Moon:
Republican and democratic lawmakers are expected to vote today on a tentative hike in the debt ceiling. The plan, announced last night by President Obama, calls for at least $2.4 trillion in spending cuts over the next decade, and while tax revenues are initially off the table, the cuts are coming from all different part of the federal budget.

Marketplace's David Gura joins us now, from Washington, to dig a bit deeper. Good morning, David.

David Gura: Hey there, Bob.

Moon: So, almost a trillion dollars in immediate cuts -- if the deal is approved by Congress today. What's on the chopping block right away?

Gura: The deal aims to save more than $900 billion by capping discretionary spending, and that includes the Pentagon budget, which amounts to about two-thirds of all the discretionary spending. I should say we haven't seen all the terms of the deal yet. We've heard from lawmakers who worked on it, a couple bullet points from Congress and the White House. There's a lot we don't know yet, but the administration says that in the first round, we'll be on track to cut $350 billion from the defense budget over 10 years, and we won't know where those cuts from until it's reviewed -- looking at the U.S. military's missions, roles and capabilities, Bob.

Moon: These numbers are so huge -- as is the Pentagon's budget. Would $350 billion be a significant cut?

Gura: That's tough to say. This is a smaller cut than what the president called for just a few months ago. And hundreds of billions smaller than what several debt-reduction commissions suggested. I talked to Winslow Wheeler. He's with the Center for Defense Information. And he told me we've got this big challenge: how to cut the defense budget, make it smaller, but not make U.S. forces suffer.

Winslow Wheeler: We've been squandering money horrendously for a long time, and if we are smart in the way that we pick those cuts, we can actually make things better, not worse.

Gura: And Bob, as you said, there's a second round of cuts that's coming up, those are yet to be determined. Depending on what happens, the defense budget could take an even bigger hit.

Moon: Our David Gura live in Washington, Thanks.

Gura: Thanks.