Auditor's explosive report on CWG: Highlights - India

06 aug 2011

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

New Delhi:  The report of the government's auditor - the Comptroller and Auditor General - has been tabled in Parliament. Among those it faults for mismanagement are Delhi Chief Minister Sheila Dikshit and the Lieutenant Governor Tejinder Khanna. These are the highlights of the 800-page report:

• There are 33 audited entities; 33 chapters, 743 pages  

• The unique challenge of monitoring activities of multiple agencies should have been met by entrusting stewardship to single point of accountability and authority which would also specify quality standards

• This stewardship should have been fully under government control. This was not followed

• May 2003 envisaged Organising Committee (OC) as government-owned registered society, with chairman of OC as a government appointee and President of Indian Olympic Association as Vice-Chairman. But it was set up in 2005 as non-government registered society with Indian Olympic Association President Suresh Kalmadi as Chair. This change was orchestrated through an updated bid in December 2003 which had no legal sanctity or relevance. It indicated changed structure which surfaced only in 2004

• Despite objections from then Sports Minister Sunil Dutt, Mr Kalmadi was named Chairman based on recommendations of the Prime Minister's Office (PMO) in December 2004

• A multiplicity of coordination committees were created, disbanded and reconstituted, leading to complete diffusion of accountability

• Government did not have realistic cost of hosting the Games. Unrealistic scope of the original bid led to revision of estimates at very short intervals right upto September 2010

• State of documentation in OC was so inadequate that we are unable to get assurance about authenticity of records

• Processing of sensitive contracts was allocated in arbitrary manner to officials who had no linkages to concerned functional area

• Award of contracts to ineligible vendors, inadequate time for bids, inexplicable delays in contract finalisation - this compromised transparency and economy

• Queen's Baton Relay - OC made payment to highly-suspect and little-known entities like AM Films and Cars. Payments were made in haste, with high amounts being given in cash

• There were delays of venue development at all stages; delays in tendering and in work execution and handover

• Constant deviations from original scope of work which led to delays and increased costs and extra payments. Delays in achieving milestones laid out in contract; penalties have still not been collected

• EMAAR was not qualified to build apartments and Athletes Village. Serious lapses in quality of construction. Service life of residential buildings is not more than 20 years without serious repair

• Streetscaping and beautification project was ill-conceived without broad over-arching vision and perspective of how this would impact urban design. Project was consultant-driven with consultants selected in arbitrary and non-transparent fashion without any budget estimates. Rs. 4.8 crore per km was paid - which was exorbitant. More than 100 crores were wasted. We acknowledge improved roads because of street-lighting. But decision to use imported street lights on certain roads was taken with consent of Chief Minister - waste of 30 crores. Price of imported lights was much higher than fair price 

• Road signs - restrictive tendering conditions were imported to benefit two major sheet manufacturers

• Reviewed 7 key roads and flyovers. Irregularities in how projects were awarded. Correction fluid was used in some tenders

• Overhaul of Connaught Place not completed in time for Games
• Host city contract meant Government had to underwrite shortfall between revenue and expenditure. Document provided for big role to be played by government. But after Games were allotted, there was a turnaround. Role and control of government was progressively reduced but at the same time, financial commitments of government were left unaffected. This was done via updated bid submitted by IOA to Ministry of Sports in December 2004 - had no legal sanctity. But it meant OC was now set up as non-government society. This updated bid also took away references of government nominee as Head of OC. This was followed by letter from Mr Kalmadi to PM - he said he should be made Chairperson of OC, while Minister of Sports would be chairperson of Steering Committee. In 2004, Kalmadi elected by IOA as Chair of OC
• November 2004 - Sunil Dutt wrote to Arjun Singh, who headed the Group of Ministers (GoM) overseeing the Games, saying that updated bid made changes that were unauthorised
• December 2004 - PMO communication endorsed Kalmadi as Chairman of OC. This document also said the arrangement would be considered at meeting in January 2005; GoM went with Mr Kalmadi as head of OC. The OC was registered as society in February 2005. The rules listed Kalmadi as Chairman by name, and not by virtue of his designation as President of IOA
• The OC had a 15-member board and had only two nominees each from the Government of India and the Delhi government
• 2007 - Ministry of Sports highlighted lack of authority of Government of India representatives and absence of government control. Then Sports Minister Mani Shankar Aiyar wrote a series of letters to PM's office highlighting lack of control by Ministry of Sports over OC
• OC was funded entirely by government but functioned without accountability

Complete cash-for-votes inquiry in 3 weeks: Supreme Court - India

05 aug 2011

Complete cash-for-votes inquiry in 3 weeks: Supreme Court

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

New Delhi:  The Delhi Police has been ordered to complete its inquiry into the cash-for-votes scandal in three weeks. The scandal revolves around three BJP MPs who claimed they had been offered a crore to vote in favour of the UPA government during a trust vote in 2008.

The court pulled up the Delhi Police. "Drop your inhibitions and follow the law. When we are monitoring the probe where is the question of inhibition?" The police was also told to identify the source of the funds that were allegedly offered as a bribe.

The BJP MPs - Ashok Argal, Faggan Singh Kulaste and Mahavir Bhagora - claim that they were offered the bribe by middlemen acting on behalf of politicians Amar Singh. In 2008, Mr Singh was a senior leader of the Samajwadi Party which provided external support to the UPA government on crucial issues. He has, on earlier occasions, denied any link to the cash-for-votes scandal.

In July 2008, the MPs created a spectacle when they marched into the Lok Sabha waving bundles of cash. Prime Minister Manmohan Singh won the vote.

The Supreme Court said, "It is so very distressing that middlemen tried to manipulate the proceeding of the Parliament and to some extent succeeded."

The Delhi Police had made no progress in its inquiry till a few weeks ago when the Supreme Court issued a stern warning. Since then, at least two people have been arrested. One of them, Sanjeev Saxena, is believed to be a former aide of Mr Singh.

A private TV channel captured some parts of the negotiations between Mr Saxena, the three MPs and another middleman on hidden camera. The BJP is believed to have co-opted the channel to conduct the sting in an attempt to expose the UPA's alleged willingness to buy MPs to survive the trust vote. 

Team India confident of bouncing back - India

04 aug 2011

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

Team India confident of bouncing back

Northampton: Despite trailing 0-2 and their world number one Test ranking at stake, India are quiet confident of turning the tables on a rampant England in the remaining two Tests of the four-match Test series.

Even as the injuries and batting failures have hit India hard, Dhoni's men are not overlooking a few positives from the two defeats at Lord's and Trent Bridge.

"Bhai sahib, yahan match to jeetna hai (we have to win matches)," Praveen Kumar, who has so far taken 13 wickets from two Tests at an average of 26.53, said.

Indians are not ready to get caught in the swirl of negatives floating around them and are working on strengthening their belief in themselves, which alone could help them turn the tide in their favour.

They are keen to draw confidence from the fact that Sachin Tendulkar was not well at Lord's, Gautam Gambhir was laid low by an elbow injury, while Rahul Dravid and VVS Laxman did little wrong in the last two Tests. Even Suresh Raina showed a glimpse of his ability.

There is not a single pacer one can find fault with, even though off-spinner Harbhajan Singh has failed miserably and "Bhajji bashing" started almost immediately.

Harbhajan, who is now ruled out of the Test series due to an abdominal strain, was being viewed as an unimaginative bowler and as somebody who wouldn't mind being injured at this stage of his career.

The off-spinner bowled just 13.4 overs in the second Test and has been woefully out of form in the series. The tweaker grabbed one for 69 in the second Test after his one for 218 in the first at Lord's. But the fact that even Graeme Swann equally struggled on seamers' strip, has conveniently been brushed under the carpet.

"We are very good at running down our own men. You break this team now and you would pay the price in Australia later this year. No spinner, other than (Shane) Warne, (Muttiah) Muralitharan and (Anil) Kumble, has taken more wickets than Harbhajan in the history of the game," said a former Indian captain, who is now a cricket commentator.

"And are Bhajji's critics implying that Warne, Murali and Kumble never had an ordinary series? Kumble averaged nearly 60 in his final three Test series. Warne averages nearly 50 in 14 Tests against India. And do you want to know what is Murali's average in India - over 45 in 11 Tests!" he added.

As far as Dhoni is concerned, he has also been a subject of similar attack. There is nothing that critics can find right with his batting, keeping or captaincy.

But the Indian team knows that it is not only him who has failed with the bat in the series but also England captain Andrew Strauss and Alastair Cook.

Dhoni's collection behind the stumps is faulted, even when the wickets have been uneven at times. There is a lack of respect for a man who has helped India reach the top of the Test ladder and stay there for 19 months.

Most of the members of the Indian cricket team have seen the highs and the lows in their careers and are experienced enough not to get bothered by all the criticism surrounding them at the moment.

Teams can and do lose a match and a series. But it must not be a trigger to stamp out the good cricketers. Players, who serve long, can have an aberration once in a while but it shouldn't be a signal to take them off the roster.

An act in haste could be one of repent later. And No.1 Test side in the world is all desperate to prove their critics wrong when they take on England in the last two Tests at Edgbaston and The Oval.

Who made Kalmadi chairman? - India

03 aug 2011

Who made Kalmadi chairman? Many denials, mystery deepens

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

New Delhi:  Just how Suresh Kalmadi became the man in charge of organising the Commonwealth Games in India has become India's latest whodunit.

The Prime Minister's Office blames Atal Behari Vajpayee's government which was in power when India bid for the Games in 2003 - a claim repeated in the Lok Sabha today by Sports Minister Ajay Maken. The BJP says that's not the case.

As Chairman of the Organising Committee (OC) of the Commonwealth Games, Mr Kalmadi led a team of men whose biggest trademark became bare-faced corruption. He was arrested in April. So whoever picked him chose unwisely.

Whose Kalmadi Is He Anyway hurtled into mega-controversy last night, when NDTV found that a report by the government's auditor blames the Prime Minister's Office for Mr Kalmadi's elevation to head of the committee that stole crores from the country. "In our opinion, the decision of the PMO for appointing Suresh Kalmadi as Chairman of the OC facilitated the conversion of the originally envisaged government-owned OC into a body effectively outside the government control," writes the Comptroller and Auditor General. The report will be presented soon in Parliament.

In the Lok Sabha, Mr Maken presented the government's view of what transpired - that when Dr Manmohan Singh's government was voted into power in 2004, the paperwork that had been signed by the Vajpayee government for the Games ensured that Mr Kalmadi would rule the Commonwealth roost.

In May 2003, India bid for the Games. At that time, an org chart sent by the Vajpayee government said that the head of the Organising Committee would be a government nominee. The vice-chairman of the committee would be the head of the Indian Olympic Association, a post Mr Kalmadi occupied. In November 2003, the government signed a contract with the parent-body of the Commonwealth Games, the CGF.

It's via this contract, Mr Maken claims, that the Vajpayee government arranged for Mr Kalmadi to chair the committee. The agreement stated that the organisation of the Games would be entrusted to the Commonwealth Games Association of the host country, in this case the Indian Olympic Association. Mr Maken says that the second mistake made was that the contract was signed by the union government, instead of the Delhi government. Mr Maken says, "The Host City Contract effectively became the 'Host Country Contract'. In the process, while it committed the Central Government to all financial and infrastructural obligations ...it, in one stroke also took away from the Government of India, any residual, amending or discretionary powers, that could have been exercised ... to salvage any wrong doings."

On November 1, 2004, the General Assembly of the Indian Olympic Association elected Mr Kalmadi the Chair of the Organising Committee. Mr Maken said that many opposition parties were represented at the General Assembly, and therefore participated in Mr Kalmadi's appointment. Case closed, as far as Dr Manmohan Singh's government is concerned.

But the BJP tells a remarkably different story. Vikram Verma, who was the Sports Minister in 2003 when India bid for and won the rights to host the Games, says that the contract always stated that the Organising Committee would be led by a government nominee, intended to be the Sports Minister. It was tampered with, he says, to delete the reference to the "government nominee."

So who fiddled with the paperwork to land Mr Kalmadi the much-coveted Chairman's post that he would later exploit so resolutely? Even today, India's bid documents on the official Games site show Mr Kalmadi as Vice-Chairman. The government's auditor, the Comptroller and Auditor General states, "In our opinion the primary objective of the document titled as the 'updated bid' was to orchestrate the appointment of the president of the IOA, Suresh Kalmadi, as the chairman of the OC executive board; since as per the May 2003 bid document, the President of the IOA would only be the Vice Chairman."

Mr Verma also challenges Mr Maken's version on another front. He says that after the UPA came to power in 2004, it misinterpreted the contract for the Games. Mr Verma says India did not have a Commonwealth Games Association - this body was to be set up. But the government that succeeded his accepted that the Indian Olympic Association would fulfill this role; and that allowed an organisation already headed by Mr Kalmadi to vote him in as the chief of the Games' Organising Committee.

As the UPA tries to deflect the blame, there appears to be several holes in its explanation. For example, a Group of Ministers met in October 2004 and decided Sunil Dutt, who was Sports Minister at the time, would head the Organising Committee. This decision was reversed within days in favour of Mr Kalmadi.  An upset Mr Dutt wrote to the Prime Minister to officially protest. In December, however, the Prime Minister's Office ratified Kalmadi's chairmanship.

The UPA has also been left somewhat exposed by letters written to the Prime Minister's Office by Mani Shankar Aiyar, who replaced Mr Dutt as Sports Minister. In 2007, Mr Aiyar warned that under Mr Kalmadi's stewardship, the Organising Committee was indulging in financial malpractices. There was no action taken.

US Senate passes debt plan to avert default - India

02 aug 2011

US Senate passes debt plan to avert default

NYT

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

Washington:  The Senate voted Tuesday to raise the government's debt ceiling and cut trillions of dollars from its spending, finally ending a fractious partisan battle just hours before the government's borrowing authority was set to run out.

The bill, which passed 74 to 26 after a short debate devoid of the oratorical passion that had echoed through both chambers of Congress for weeks, was headed for the White House, where President Obama was poised to sign it immediately.

A few minutes later, Mr. Obama said he would sign the bill right away, but excoriated his opposition for what he called a manufactured crisis that could have been avoided. "Voters may have chosen divided government," he said, "but they sure didn't vote for dysfunctional government."

The compromise, which the House passed on Monday, has been decried by Democrats as being tilted too heavily toward the priorities of Republicans, mainly because it does not raise any new taxes as it reduces budget deficits by at least $2.1 trillion in the next ten years. But it attracted many of their votes, if only because the many months of standoff had brought the country perilously close to default.

The wrangling also laid bare divisions within both parties, in the House when scores of the most conservative Republican members and most liberal among the Democrats refused to vote for the bill, and again in the Senate where senators such as Kelly Ayotte of New Hampshire and Mike Lee of Utah, both Republican freshmen blessed by the Tea Party last year, voted against it. The last to vote was Senator Olympia J. Snowe of Maine, who conferred for several minutes with Senator Jon Kyl of Arizona, her face twisted in a grimace, then voted yes, as he had done. Ms. Snowe, who faces re-election next year, is already a target of Tea Party activists in her state.

Senator Mitch McConnell of Kentucky, the minority leader, who played a central role in arriving at the ultimate compromise, said his party's goal was "to get as much spending cuts as we could from a government we didn't control."

"It may have been messy," he said. "It may have appeared to some that their government wasn't working, but in fact the opposite was true." Legislating, he added, "was never meant to be pretty."

He and Senator Harry Reid of Nevada, the majority leader, had a gentle toe-to-toe as the debate ended, praising each other's performance while denouncing each other on the substance.

"It's never, ever personal," Mr. McConnell said.

Mr. Reid presaged the next battle, when an appointed Congressional committee is to seek new ways to cut the deficit, by rejecting the Republican's assertions of his Republican colleagues that the next phase would again exclude revenue increases, which the Democrats failed to include in the first round. "That's not going to happen," Mr. Reid said.

Mr. Obama, too, called for the ultimate solution to include new revenues, including higher taxes by the wealthiest Americans and closing corporate loopholes, saying that he would fight for that approach as the Congressional commission considers what to recommend to Congress for an up-or-down vote before the end of the year, as the new law requires. 

US debt deal: House of Representatives passes bill - India

01 aug 2011

US debt deal: House of Representatives passes bill

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

Washington:  After months of partisan impasse, the US House of Representatives on Monday approved a budget agreement intended to head off a potential government default, pushing Congress a big step closer to the conclusion of a bitter fight that has left both parties bruised and exhausted.

Despite the tension and uncertainty that has surrounded efforts to raise the debt ceiling, the vote of 269 to 161 was relatively strong in support of the plan, which would cut more than $2.1 trillion in government spending over 10 years while extending the borrowing authority of the Treasury Department. It would also create a powerful new joint Congressional committee to recommend broad changes in spending - and possibly in tax policy - to reduce the deficit.

Scores of Democrats initially held back from voting to force Republicans to register their positions first. Then, as the time for voting wound down, Representative Gabrielle Giffords, Democrat of Arizona, returned to the floor for the first time since being shot in January and voted for the bill to jubilant applause and embraces from her colleagues. It provided an unexpected, unifying ending to a fierce standoff.

The vote followed a quick but determined effort by both Democrats and Republicans to persuade skeptical colleagues to back the plan, which was rushed to the floor in order to assure financial markets and investors in advance of a Tuesday deadline.  In the end, 174 Republicans and 95 Democrats backed it; 66 Republicans and 95 Democrats voted against it.

The Senate, where approval is considered likely, is scheduled to vote at noon on Tuesday and then send the measure to Mr. Obama less than 12 hours before the time when the Treasury Department has said it could become unable to meet all of its financial obligations.

The deal sets in motion a substantial shift in fiscal policy at a moment when the economic recovery appears especially fragile. Although the actual spending cuts in the next year or two would be relatively modest in the context of a $3.7 trillion federal budget, they would represent the beginning of a new era of restraint at a time when unemployment remains above 9 percent, growth is slowing and there are few good policy options for giving the economy a stimulative kick.

The precise impact on the economy is a matter of debate. Proponents of spending restraint say the economy will benefit in the long run from getting the deficit and the accumulated national debt under control, and that failure to act now would risk long-term decline in the nation's economic might. Others say that by foreclosing the option of using government spending to counteract economic weakness, the country is increasing the risk of persistently high unemployment and even another recession.

The negotiations exposed deep fissures within both parties, and Republicans and Democrats alike made clear they were not happy swallowing the agreement, which was struck late Sunday between the bipartisan leadership of Congress and President Obama. But top lawmakers characterized it as a must-pass measure needed to prevent a potentially crippling blow to the struggling economy.

"The default of the United States is not an option," said Representative Steny H. Hoyer of Maryland, the No. 2 Democrat. He urged lawmakers to vote not as members of either party, but as "Americans concerned about the fiscal posture of their country, about the confidence that people around the world have in the American dollar."

Republicans, while expressing dissatisfaction that the measure did not provide more savings, said it was a modest but useful first step in reversing the government's spending course and claimed they had prevailed by keeping the agreement free of new revenue and offsetting the increase in the debt limit with spending cuts.

"I would like to say this bill solves our problems," said Representative Jeb Hensarling of Texas, a prominent fiscal hawk in the Republican leadership. "It doesn't. It is a solid  first step."

Worried about defections by conservatives and liberals alike, leaders of both parties gathered their members for briefings to explain the proposal. Speaker John A. Boehner met specially with Republicans on the House Armed Services Committee, an important voting bloc whose members were raising alarms about potential Pentagon spending cuts.

Democrats, many disgruntled over what they saw as a White House-negotiated giveaway to Republicans, heard from Vice President Joseph R. Biden Jr., who told House and Senate members in separate meetings that the administration had to cut the deal with uncompromising Republicans to avoid a default.

The vice president spent hours behind closed doors in the Capitol. According to participants in the meetings, Mr. Biden mixed listening and gentle persuasion, urging Democrats to back the plan. Administration officials fanned out to make a case that the structure of the deal - with a trigger that could force deep cuts in military spending as well as in domestic programs if the two parties cannot agree on how to reduce the deficit further - provided Democrats with more leverage to push for higher tax revenue as part of the solution rather than relying totally on spending cuts.

But many Democrats said they saw it as a deal negotiated on the backs of poor and working-class Americans, with no sacrifice by the rich in the form of tax increases.

"I wouldn't call it anger, but we are perplexed that it has turned out like it has," said Representative G. K. Butterfield, Democrat of North Carolina, grimacing as he left the meeting with Mr. Biden. "But we've run out of options and we know the consequences. I've heard horror stories from the Great Depression. I don't want my fingerprints on that."

In the Senate, some Democrats attacked the plan and joined their House colleagues in complaining that the White House had bent to the will of  an ideologically rigid majority in the House.

"This is capitulation to a radical fringe of the Republican Party that will not bend until they break this economy or get their own way," said Senator Robert Menendez, Democrat of New Jersey. "This deal is not fair, and I will not support it."

Senator Harry Reid, the majority leader, acknowledged the unrest as the Senate prepared to follow the House in voting.

"Neither side got what they wanted, but it is the essence of compromise," said Mr. Reid, who said most senators "realize the situation we're in and the alternative."

House and Senate Republicans, too, raised objections, saying the proposal fell short of what was needed and invested too much power in a new special joint committee that would be charged with finding $1.5 trillion or more in future cuts by Thanksgiving after a first round of $1 trillion called for in the legislation.

"This agreement falls short of addressing our historic economic challenges and does not alleviate the threat of a crippling downgrade in America's credit rating," said Representative Steve Southerland, a freshman Republican from Florida.

But Mr. Boehner, who negotiated the deal with the White House along with Senator Mitch McConnell, the minority leader, received two standing ovations in the private party meeting, and the House Republicans rallied around him in the final vote that he said represented a culture change in the nation's capital.

"We are cutting spending," Mr. Boehner told reporters. "We are spending less money next year in discretionary spending than we spent last year. You haven't heard that kind of a statement before around this town."

Several senators said they were struggling with what they would do, but suggested that if it became a matter of their yes vote or default, they would back the measure.

Senator Joseph I. Lieberman, an independent from Connecticut, said that because Republicans would not budge on new revenue and Democrats sought to protect entitlement programs, federal agencies would bear the brunt of the Congressional drive for deficit reduction.

"They are getting whacked," Mr. Lieberman said. He said he remained worried about the impact on the military if the new committee failed to produce deficit-reduction legislation later this year, triggering an across-the-board slice of more than $1 trillion. Half of those savings would come from security-related spending.

Despite such misgivings, members of both parties welcomed the end of the debt limit clash after months of intrigue, partisan rancor and stop-and-go negotiations that ultimately left Congress voting just hours before a deadline to avoid default.

"On to the next fight," said Senator John Cornyn, Republican of Texas.

Lawmakers and aides were already speculating about who might be picked or passed over for the 12-member Joint Select Committee on Deficit Reduction and were arguing over whether the panel truly had the ability to seek new tax revenue.

But given the energy that had been expended in the fight, most members of Congress simply seemed ready to head home for the summer. The House dispatched lawmakers until Sept. 7. Senators were eager to follow.

"I have a home in Nevada that I haven't seen in months," Mr. Reid said wistfully on the floor. "My pomegranate trees are, I'm told, blossoming."

US reaches debt deal two days ahead of deadline - India

31 july 2011

US reaches debt deal two days ahead of deadline

Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India

Washington:  President Obama and Congressional leaders of both parties said late Sunday that they had agreed to a framework for a budget deal that would cut trillions of dollars in federal spending over the next decade and clear the way for an increase in the government's borrowing limit.

With the health of the fragile economy hanging in the balance and financial markets watching closely, the leaders said they would present the compromise to their caucuses on Monday morning in hopes of enacting it before a Tuesday deadline to avert default.

Even as the president was speaking from the White House on Sunday night, Speaker John A. Boehner was on a conference call with House Republicans, trying to sell them on the proposal he had signed off on only minutes before.

Since he is likely to lose the most conservative elements of the caucus, Mr. Boehner faces the task of framing the pact as friendly enough to Republican principles to win over a significant group of his rank-and-file without alienating Democrats he will need to push it over the top.

President Obama, in a hastily called appearance with reporters that ended a day of uncertainty, said that the compromise would "allow us to avoid default and end the crisis that Washington imposed on the rest of America."

"It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months," he said. "And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy."

Just before Mr. Obama spoke on television, the two Senate leaders, Harry Reid and Mitch McConnell, took the floor to endorse the pact as well.

"I am relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic, bipartisan compromise that ends this dangerous standoff," said Mr. Reid, the majority leader.

The tentative agreement calls for at least $2.5 trillion in spending cuts over 10 years, a new Congressional committee to recommend a deficit-reduction proposal by Thanksgiving, and a two-step increase in the debt ceiling.

The announcement concluded a tumultuous 24 hours that saw hopes rise Saturday night over the prospects of a deal that might have concluded the budget stalemate. By Sunday, worry set in again as lawmakers and White House officials struggled to hammer out the fine points of an agreement that must clear a Senate controlled by Democrats as well as by the Republican House.

If the deal clears Congress, with its new special joint committee to explore deficit reduction, it will ensure that the size and scope of the federal government and the tension between spending and taxes will remain front and center in the Washington debate headed into the 2012 election.

Markets reacted favorably to the announcement. Asian markets jumped on news of the deal. The Nikkei was up 1.7 percent in early trading; the dollar rose about 1.4 percent against the Japanese yen.

The agreement came after a day of wrangling over Pentagon cuts, and it still must win majority support in the Senate and the House, with the House providing a particular challenge.

On the conference call, Mr. Boehner sought to portray the new agreement as one heavily tilted toward the Republican call for no new revenue, and he said it met the goal of instituting cuts greater than the amount of the debt limit increase. In a presentation, he said the pact would prevent a "job-killing default" - a warning to lawmakers that failure to raise the limit could add to the bleak employment picture.

"Our framework is now on the table that will end this crisis in a manner that meets our principles of smaller government," said Mr. Boehner, who said he hoped to get the legislation onto the House floor as quickly as possible.

As conversations flowed between the White House and Capitol Hill, Mr. Reid earlier Sunday publicly embraced the compromise that would tie deep spending cuts to a debt ceiling increase, though his plan to bring it to a vote as early as Sunday was put off, as was a tentative meeting of Senate Democrats to review it.

According to Congressional and administration officials, the delay was attributable to efforts by Mr. Boehner, Republican of Ohio, to limit immediate reductions in the Pentagon budget and better protect it from future cuts in order to cement votes from defense hawks. He needs those votes to win approval of the plan in the House.

The tense, last-minute negotiations were taking place against a backdrop of uncertainty, with a looming threat of a costly downgrade of the nation's credit rating and with investors worried about the global economic impact of a possible default. The political stakes were unusually high as well, with leaders in both parties staking out positions that may well be central to their re-election chances in 2012.

If the compromise were to be nailed down, attention would immediately turn to selling it to the rank-and-file. The leadership was anticipating objections from Republicans that the plan did not go far enough while Democrats were wary that Medicare spending would take a hit.

Despite the remaining political and procedural hurdles, the predominant mood on Capitol Hill was one of cautious relief that the gears were turning to produce legislation that would eliminate the threat of a potential government default after Tuesday.

Referring to the tortuous negotiations, Senator Dianne Feinstein, Democrat of California, said: "Sausage making is not pretty. But the sausage we have, I think, is a very different sausage from when we started."

She noted that the proposed caps on federal spending, combined with creation of a new evenly divided panel to cut the deficit further, could fundamentally change federal finances.

But not everyone was pleased. "It may be the best we can do," said Senator Jeff Sessions of Alabama, the senior Republican on the Budget Committee. "But I do not think it's enough."

With the talks appearing to make progress, the Senate blocked a Democratic proposal for a debt limit increase on a vote 50-49, falling 10 votes short of the 60 required to limit debate. But all attention was on the negotiations.

White House aides were in a flurry of meetings as they prepared for the prospect of announcing a deal. After weeks of political theatrics and Congressional votes that appeared to go nowhere, the mood at the White House on Sunday afternoon was one of cautious optimism.

But Obama administration officials are also aware of the precarious risk the president was running if he strikes a deal that Congressional Democrats find hard to swallow. Mr. Obama's top political aides, including Vice President Joseph R. Biden Jr. and the senior White House adviser David Plouffe, were on the phone Sunday afternoon with Democratic leaders, who gathered in the Capitol Sunday afternoon to explore the outlook for the measure.

A major question mark remained the House of Representatives, where a vote on the agreement could occur Monday and where Mr. Boehner has found it difficult to corral the most conservative wing of the rank-and-file. While the bipartisan deal would be expected to attract significant Democratic support, Mr. Boehner must still persuade many of his members to get behind it and would be pushing for at least half of the House Republicans to back it.

In an e-mail to Republican House members, Mr. Boehner noted that "discussions are under way on legislation that will cut government spending more than it increases the debt limit, and advance the cause of the balanced budget amendment, without job-killing tax hikes."

"Those talks are moving in the right direction, but serious issues remain," the speaker wrote.

Under the plan as described by officials briefed on its outline, the debt limit would be increased by $900 billion in the first installment, subject to a Congressional vote of disapproval that Mr. Obama would be able to veto. To prevent a default, $400 billion would be added immediately.

A second increase of $1.2 trillion to $1.5 trillion would be available subject to a second vote of disapproval by Congress. At the same time, a new joint Congressional committee would be created to find a like amount of cuts.

If the evenly divided committee failed to agree on a plan, Congress would either have to approve a balanced budget agreement or accept an across-the-board cut in spending in line with the committee's goal, with 50 percent of the savings coming from the Pentagon beginning in 2013. Medicare would also sustain cuts, though the reductions would be capped.

The rationale for picking such favored programs as the Pentagon for Republicans and Medicare for Democrats was to provide a strong incentive for the new committee to avoid a deadlock and deliver a deficit reduction plan that could clear Congress.

According to Democratic officials close to the talks, among the final sticking points that were worked out were efforts to exempt the Medicaid program from reductions under the automatic spending reductions and make certain that the Medicare cuts hit health care providers, not beneficiaries.

Negotiators did agree that any deal would not include language that could lead to a new formula for the annual cost-of-living adjustments for Social Security beneficiaries that could save more than $100 billion in the first 10 years. While many economists have long said the existing formula overstates inflation, many Democrats oppose any change that would reduce benefits from current law.

Dropping the proposal from the White House-Congressional talks reflected in part the influence of Representative Nancy Pelosi, the Democratic minority leader, whose negotiating hand has been strengthened since she will have to deliver a significant number of Democratic votes for House passage of any solution given the likelihood that Mr. Boehner will face significant loss of Republican votes. 

Senators said they expected that the plan as it was being portrayed would attract a bipartisan vote even though both Democrats and Republicans would have reservations.

Senator Mike Johanns, Republican of Nebraska, said that from the terms of the deal described to him, "I think I will be satisfied and supportive." After years of work, he noted, Congress has become "serious about cuts in spending."