Social Security supporters attend a rally in the Dirksen Senate Office Building on Capitol Hill.
Social Security supporters attend a rally in the Dirksen Senate Office Building on Capitol Hill. - 
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Kai Ryssdal: Should you, by some chance, have been cut off from all forms of communication for the last 18 hours, allow me to be the first to tell you: we've got a debt deal. Or at least we think we do.

Congressional leaders and the White House announced last night they've come to terms on a plan that will keep the United States current on its bills -- that is, not in default. The House voted yea this afternoon, the Senate takes it up tomorrow.

So to start us off, we sent Marketplace's David Gura off this morning with the task of explaining exactly how this thing might reduce the deficit by $2 trillion over the next decade. Here's David.

David Gura: There'd be two phases to the plan. Phase one wouldn't touch the big government entitlement programs: Social Security, Medicare, Medicaid. Instead, it would put limits on so-called discretionary spending. That's the money the government spends on things like roads and weapons. The CBO says this part of the plan would reduce the deficit by almost $1 trillion. But that doesn't mean that Medicare and Social Security won't be touched.

Ryan McConaghy: They're not dealt with immediately, but the framework that's been set up by this deal puts them on the table, no doubt.

That's Ryan McConaghy with Third Way, a centrist think tank that backs the deal. That framework he's talking about is the second phase of the plan: a "special committee" made up of six Democrats and six Republicans. They'd have to come up with more savings -- $1.5 trillion worth -- by Thanksgiving. And if they can't:


The committee's failure to reach an agreement would trigger more than $1 trillion worth of cuts, divided evenly between domestic spending and defense spending. Those cuts would kick in automatically on Jan. 1st, 2013, the day the Bush-era tax cuts are set to expire.

Maya MacGuineas is with the New America Foundation, another centrist think tank. She says cuts to entitlement programs are inevitable.

Maya MacGuineas: You can make changes to those programs that are sensible, that are phased in gradually, that protect a lot of the current retirees, and that, most importantly I think, protect the people who depend on those programs.

And MacGuineas says the alternative -- an indiscriminate cut -- could end up hurting most Americans.

In Washington, I'm David Gura for Marketplace.

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Follow David Gura at @davidgura