The Republicans and Democrats have come to an agreement. Few people are likely to be surprised that there was much compromise. The debt ceiling willing raised and token "cuts" will be made. There will be no tax hike in the current proposal and the proposed "balanced budget" amendment will not be made a requirement.
Proposed cuts, as those familiar with the dishonest accounting in Washington are aware, are in fact cuts in planned spending not cuts in actual spending. This means government will still grow just by less then planned. The proposed cuts are $900 billion with an equal increase in the debt limit. The social safety net and its massive unfunded liabilities will not be touched.
Since this legislation will not fix the true issue of deficit spending, a committee of 6 Republicans and 6 Democrats with come together to find a way to reduce the deficit spending by $1.5 Trillion. Since the expected revenue gain from the extended Bush tax cuts finally sun-setting does not count towards the total, we can expect either more cuts or higher taxes, and likely will get a combination of both.
Nevada's own Harry Reid called this a success of compromise by both parties. Unfortunately, the compromise is going to cost the average taxpayer. Democrats are unwilling to make necessary cuts and Republicans cannot support increases in revenue.
Items that should be cut or changed but will not be are corporate tax loopholes and corporate welfare. Eliminating both of these would help with the deficit as well as level the corporate playing field. These could be made revenue neutral by lowering the corporate tax rate to encourage corporations who have fled to come back to the US. When those companies come back, the new tax revenue collected would then be used to reduce the deficit.
What will likely happen? I expect that the upper bracket tax rates will be increased despite the fact that the rich can more easily move their money to avoid paying higher taxes. The revenue from the tax hike will be far short of what was expected as the rich move their money to protect it as they always do so we may see even higher taxes on the rich or increases in the lower brackets. There will likely only token changes if any to our unsustainable entitlement programs that will mean future generations will have an even greater burden placed upon them.
In the end, the politicians have compromised and it is our future that has been compromised.