By Tim Montgomerie
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The Wall Street Journal is hailing last night's US budget deal (that still needs to be formally ratified) as the biggest victory for small government conservatives since the 1996 welfare reforms.
What does the deal do?
- It is a two phase process;
- In phase one the debt ceiling is raised but spending is cut by a greater amount;
- There'll be budget caps so that failure to allocate first phase spending cuts will introduce immediate across-the-board cuts;
- Phase one also excludes "job-killing" tax hikes or, indeed, any tax hikes;
- In phase two there'll be a larger increase in the debt ceiling and the accompanying fiscal package will be decided by a joint committee of all parties;
- Unless there's agreement in phase two there could be big defence cuts;
- This phase two joint committee will examine entitlement reform.