Four things you need to know about the coming debt deal

Despite the politicking in pubic, some sources say that Republicans and Democrats are very close to a tax and spending deal that will save the country from a potential fiscal nightmare. Congressional insiders report that Barack Obama and John Boehner (R-OH) are about to shake hands on the deal.

WASHINGTON, DC (Catholic Online) - To watch the news, you would think the two sides are as opposed as every to any agreement, but insiders say that Boehner and Obama have been working closely to hammer out a  deal. The details of the likely deal are now becoming known as the top ranking politicians leak the details to the media in the hope of testing their ideas.

Here's what you should know:

1. Expect your taxes to rise

Taxes will go up for the wealthiest Americans. All those earning more than $250,000 per year will now pay a significantly greater burden in taxes. The top marginal rate for these earners is unknown, but it is expected to be close to the Clinton era tax rates, near 39 percent.

About $1.2 trillion in tax revenue is expected to come from this source.

2. Expect entitlement cuts

Republicans would never consent to a tax hike unless Democrats were willing to cut spending. Anticipated savings will come from a variety of sources including cuts to Medicare, means testing, and possibly raising the retirement age. Social Security has been mentioned, but it is unlikely that Democrats would support any deal that reduces those benefits.

About $400 billion in savings is expected from these cuts.

3. If a deal fails, expect Republicans to take the fall

Although many Republicans were voted into office, preserving their hold in Congress, a majority of Americans have said in multiple polls that they would blame Republicans if a deal were not reached. This places Obama in a strong position to dictate terms to them, since he faces less political risk.

4. The deal is up to Obama and Boehner

By working together, both Obama and Boehner are able to put aside a lot of politicking that normally interferes with making a deal. The pair have been conferring privately, both in person and by phone, to settle their disagreements on the deal. Insiders report there is some give and take on both sides.

When all is done, Boehner will have to sell the plan to House Republicans. If the plan proves too unpopular, then Boehner will be blamed and the remainder of the party can carry on.

Whatever shape the final deal takes, it appears likely to happen and will be a compromise that neither side can laud as a great success, especially Republicans. However, given the risk of recession and the dangers of public perception, both sides have powerful incentive to reach an agreement and it appears they are about to do just that.

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