The congressional super-committee is supposed to come up with ways to reduce the deficit by $1.2 trillion – either spending cuts or revenue increases. They have to do that, or else a series of automatic cuts kick in.
From the New York Times:
For the first time since Republicans won control of the House nearly a year ago, Democrats believe that they have the advantage — a result, administration officials say, of terms they negotiated in the August compromise that many liberals denounced as a sell-out.
Under those terms, Republicans cannot threaten a default again to get their way, because the deal increased the debt limit enough to cover borrowing through 2012. Also, the automatic cuts in 2013 would hit military programs hard — an outcome Republicans are more eager than Democrats to avoid — while Medicaid and Medicare benefits are exempt.
Another factor increasing Democrats’ leverage: the Bush-era tax cuts expire after 2012. Mr. Obama vows to sign an extension only for households with taxable income under $250,000; not extending the Bush rates for higher incomes would raise about $1 trillion over a decade — though, of course, if Republicans control the White House and Congress in 2013, they could try to renew the cuts for the wealthy.