House Speaker John Boehner may have had to ice his debt limit/deficit reduction plan because of a lukewarm reception from House Republicans and the Congressional Budget Office. But Senate Majority Leader Harry Reid’s proposal has problems of its own and probably won’t advance any further than Boehner’s in its present form.
|Senate Majority Leader Harry Reid
White House Chief of Staff Bill Daley told Bloomberg that he thinks Reid’s plan will pass the Senate — no great feat, given the Democrats’ control of that body. But even Daley pointed out that Senate passage isn’t assured. “In today's time, everything's uncertain,” he said.
And in any case, Reid’s plan almost certainly would be dead on arrival in the Republican-controlled House. Daley acknowledged as much. “I wouldn't say that as it [Reid’s plan] is today that that would get a large number of Republican supporters," he said.
Reid’s blueprint would raise the debt ceiling through 2012 and subtract $1.2 trillion from annual appropriations to federal agencies and recurring programs like agriculture subsidies. It also mirrors earlier Republican plans that attribute $1 trillion in deficit reduction to the unwinding already planned of our military operations in Iraq and Afghanistan.
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But the Congressional Budget Office (CBO) notes that this $2.2 trillion deficit decrease over the next 10 years falls short of the $2.7 trillion that Democratic senators said their plan would save. The Democrats’ idea is to match a $2.7 trillion debt limit increase through 2012 with spending cuts of the same magnitude.
Some of the supposed cuts in the Senate Democrats' plan would likely come after their budget’s 10-year time frame, the CBO concluded.
To be sure, the CBO said Boehner’s plan for $1.2 trillion in spending cuts to cover a short-term $1 trillion increase in the debt limit (through early next year) falls short of its target by $350 billion. Boehner’s proposal is part of a two-step program to slash spending by $3 trillion over the next decade.
Republicans demand that any increase in the $14.3 trillion debt ceiling be matched or exceeded by deficit reduction only through spending cuts.
Some budget experts note that Reid’s plan is largely a gimmick, given that President Barack Obama already has decided to draw down military operations in Iraq and Afghanistan.
But Republicans are ambivalent on that issue, because some GOP legislators themselves want to leave open the option of claiming savings from ending that military activity in the future.
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