Washington (CNN) -- After weeks of bipartisan negotiations, President Barack Obama said congressional leaders agreed to a plan that would lift the nation's $14.3 trillion debt ceiling and avoid an unprecedented default on the nation's debt -- if, that is, members of Congress vote to approve the agreement.
A Senate Democratic leadership aide told CNN that the Senate planned to vote first on the measure on Monday afternoon, and if the measure passes an expected Republican filibuster attempt, the House could vote on it Monday night.
Debt deal vote likely on Monday
House Speaker John Boehner told fellow Republicans on Sunday night that he hopes a vote will be held on the measure Monday as well, a Republican said.
If the debt ceiling is not raised by Tuesday, Americans could face rising interest rates and the value of the U.S. dollar may drop compared to other currencies, among other problems.
As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Some financial experts have warned that America's triple-A credit rating could be downgraded and the stock market -- which has already fallen over the past week, in part due to lingering uncertainty over the debt talks -- to crash.
Moreover, the federal government will not be able to pay all its bills next month without an increase in the debt limit. Obama recently indicated he can't guarantee Social Security checks will be mailed out on time. Other critical government programs could be endangered as well.
If approved, the plan agreed upon by the White House and congressional leaders would, as a first step, include about $1 trillion in spending cuts spread out over 10 years while raising the debt ceiling by the same amount. These cuts would be "balanced between defense and non-defense spending," according to a White House fact sheet.
The proposal also would set up a special committee of Democratic and Republican legislators from both chambers of Congress to recommend additional deficit reduction steps. They could call for tax reform to raise revenues, or propose cuts to popular entitlement programs such as Medicare and Social Security. The White House said in its fact sheet that this group would look to recoup an additional $1.5 trillion through budget cuts or revenue hikes.
This committee's recommendations would be due by November 23 and go to a vote by Congress, without any amendments, by December 23. If Congress fails to pass the package, a so-called "trigger" mechanism would enact automatic spending cuts split evenly between military and non-military programs. Either way -- with the package passed by Congress or the trigger of automatic cuts -- a second increase in the debt ceiling would occur, but with an accompanying congressional vote of disapproval.
In addition, the agreement would require both chambers of Congress to vote on adding a balanced budget amendment to the U.S. Constitution. Such an amendment would require two-thirds majorities in both chambers to pass, followed by ratification by 38 states -- a process likely to take years.
Where do things stand in the fight to raise the debt ceiling?
It's not over until the vote
House Speaker John Boehner told House Republicans on Sunday night that there is nothing in the framework of the debt agreement that "violates our principles," according to a transcript of his remarks obtained by CNN. "It's all spending cuts. The White House bid to raise taxes has been shut down. And as I vowed back in May -- when everyone thought I was crazy for saying it -- every dollar of debt limit increase will be matched by more than a dollar of spending cuts. And in doing this, we've stopping a job-killing national default that none of us wanted," he reportedly said.
Boehner told his fellow Republicans, on this same conference call, that his goal is to have a vote on the compromise bill on Monday.
House Minority Leader Nancy Pelosi, D-California, told reporters Sunday that she needs to see "the final product" in writing before she can decide if she supports it. Pelosi said she would meet with the House Democratic caucus Monday to discuss the matter. "I don't know all the particulars of what the final product is in writing and what the ramifications will be," she said, noting the measure will have an impact for a decade or more. Asked about the outcome, she warned: "We all may not be able to support it or none of us may be able to support it."
A final sticking point in the deal, before it was finalized, related to the percentage of cuts that would come from the military's budget. Democratic and Republican sources familiar with discussions told CNN on condition of not being identified that Boehner had pushed to minimize military cuts.
The developments Sunday came a day after the GOP-controlled House rejected the debt ceiling plan proposed by Senate Majority Leader Harry Reid, D-Nevada. That plan was rejected, 246-173. Most Democrats supported Reid's plan, while every Republican in the chamber rejected it.
On Friday, the House passed a proposal put forward by Boehner that sought to raise the debt ceiling and cut government spending while requiring that Congress pass a balanced budget amendment to the U.S. Constitution. The 218-210 vote was strictly on party lines. The Senate then voted to table Boehner's bill, 59-41 -- effectively killing it.
Boehner's plan called for $917 billion in savings over the next decade, while creating a special congressional committee to recommend additional savings of $1.6 trillion or more. It would have allowed the debt ceiling to be increased by a total of roughly $2.5 trillion through two separate votes. The $2.5 trillion total would be enough to fund the federal government through the end of 2012.
The plan originally called for a congressional vote on a balanced budget amendment to the Constitution by the end of the year. Boehner then reached out to disgruntled conservatives by amending the plan to require congressional passage of such an amendment as a condition for raising the debt limit by the full $2.5 trillion.
Minutes before Obama addressed reporters Sunday night, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell both announced on the Senate floor Sunday night that the White House and congressional leaders had agreed on a compromise to cut into the nation's deficit and raise its debt ceiling.
If all goes as planned, Democratic leaders hope to start to debate on the bill between noon and 2 p.m. Monday, a Senate Democratic leadership aide said. A vote on the compromise -- which is likely to require a 60-vote threshold -- would ideally be late Monday afternoon.
Sen. John Hoeven, R-North Dakota, told CNN that cuts to military spending had been a final sticking point, prior to the final agreement being reached.
Before going on the Senate floor, Reid's office issued a statement saying, "Senator Reid has signed off on the debt-ceiling agreement pending caucus approval. A senior Senate Democratic aide told CNN on condition of not being identified that while some grumbling is occurring among Democratic senators, they are likely to support the compromise and it "will get the votes."
Earlier Sunday, McConnell had told CNN that the two parties were "very close" to reaching an agreement. "We had a very good day yesterday," the Kentucky Republican said, adding that the two sides "made dramatic progress" in negotiations.
Initial news of a possible deal came shortly after the Senate delayed consideration of a debt ceiling proposal by Reid late Saturday night, pushing back a key procedural vote by 12 hours. When that vote occurred Sunday afternoon, Republicans blocked a Democratic effort to end debate on the Reid proposal and move to a vote, extending consideration of the plan while negotiations continue. The vote was 50-49, short of the super-majority of 60 required to pass.
As proposed, Reid's plan would have reduced federal deficits over the next decade by $2.4 trillion while raising the debt ceiling by a similar amount -- meeting the GOP's demand that total savings should at least equal any total debt ceiling hike. Roughly $1 trillion in the savings were based on the planned U.S. withdrawals from military engagements in Afghanistan and Iraq.
Reid's plan also would have established a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee's proposals would be guaranteed a Senate vote with no amendments by the end of this year. That commission would be much like the one that's part of the compromise proposal.
Obama said Sunday night that the compromise agreement "will reduce the deficit and avoid default -- a default that would have had a devastating effect on our economy." He added that it is structured to ensure "that we will not face this kind of crisis in six months, or eight months, or 12 months."
He claimed the first part of the agreement, cutting $1 trillion over 10 years, would reduce annual domestic spending to "the lowest level ... since Dwight Eisenhower was president."
The president said that "everything will be on the table" when a bipartisan commission considers ways to cut the nation's deficit, as mandated in the second step of the compromise. He vowed to "continue to make a detailed case to ... lawmakers about why I believe a balanced approach" -- one that could include revenue increases -- "is necessary to finish the job."
He said that this isn't "the deal I would have preferred," but spoke positively that it makes "a serious down payment on the deficit reduction we need and gives each party a strong incentive to get a balanced plan done before the end of the year."
A Democratic source told CNN on condition of not being identified that Vice President Joe Biden had engaged in behind-the-scenes negotiations Sunday with congressional legislators.
The president previously had endorsed Reid's plan and threatened a veto of Boehner's plan. Obama had said he strongly opposes any bill that doesn't raise the debt ceiling through the 2012 election -- something, he said, that would not happen under the compromise agreement. He also had promised to veto any short-term debt ceiling extension unless it paves the way for a broader agreement, but is open to a very brief extension of a few days to enable congressional approval of a pending deal.
On Friday, Obama urged Senate Democrats and Republicans to take the lead in congressional negotiations. He said the House GOP plan "has no chance of becoming law." Obama also urged Americans to keep contacting members of Congress in order "to keep the pressure on Washington."
The president made a nationally televised plea for compromise July 25, though he also criticized Republicans for opposing any tax hikes on the wealthy.