Tags: Debt | Limit | Compromise | Plan

Debt-Limit Compromise Plan to Save $2.1 Trillion, CBO Says

Monday, 01 Aug 2011 12:39 PM

A compromise U.S. deficit-reduction plan announced last night would save $2.1 trillion over the next 10 years, according to the nonpartisan Congressional Budget Office. The number is in line with lawmakers’ spending-cut goals.

The savings would come in two rounds, with $917 billion in cuts to so-called discretionary spending, the agency said. A special committee would be charged with finding another $1.5 trillion in cuts, though if it failed to act, there would be automatic cuts totaling $1.2 trillion. The CBO used the latter figure in its estimate because those cuts would be guaranteed.

The agreement reached yesterday is designed to clear the way for an increase in the government’s $14.3 trillion debt limit that the Treasury Department says is needed by tomorrow.

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