The plan would:
-Immediately increase the debt limit by $400 billion, with Obama permitted to order another $500 billion increase this fall unless both House and Senate override him by veto-proof margins; a third installment of between $1.2 trillion and $1.5 trillion would be made available after enactment of matching levels of additional spending cuts recommended by a special joint committee of lawmakers. The full $1.5 trillion could also be available if Congress adopts and sends to the states for ratification a balanced budget amendment to the Constitution.
-Cut more than $900 billion over 10 years from the day-to-day operating budgets of Cabinet agencies. Caps spending passed by Congress for agency budgets at $1.043 trillion in 2012, $7 billion below 2011 levels.
-Create a 12-person, House-Senate committee evenly divided between the political parties; charged with producing up to $1.5 trillion more in deficit cuts over 10 years. If a majority of the committee agrees on a plan, it would receive a vote in both the House and the Senate. If the panel deadlocks or fails to produce at least $1.2 trillion in additional cuts, or if Congress fails to enact its recommendations, the White House budget office would impose across-the-board spending cuts across much of the federal budget, including the Pentagon, domestic agency budgets and farm subsidies. Many federal benefits programs, however, would not be covered by this, including Social Security, Medicaid, veterans' benefits, and federal retirement benefits.
-Require both House and Senate to vote on a balanced budget amendment to the Constitution.
-Establish "program integrity" initiatives aimed at stemming abuses in benefits programs like Social Security.
-Increase funding for Pell Grants for low-income college students by $17 billion over 2012-13, financed by curbs in student loan subsidies.