Harry Reid Debt Ceiling Plan Would Save $2.2 Trillion: CBO

WASHINGTON - The Senate Democratic plan to raise the debt ceiling would slash spending cuts far deeper than House Speaker John Boehner's proposal, according to a letter sent to Senate Majority Leader Harry Reid (D-Nev.) by the official congressional scorekeeper on Wednesday morning.

Reid's plan would reduce the deficit by $2.2 trillion over the next decade, the nonpartisan Congressional Budget Office said. Boehner's would trim just $850 billion, the CBO said Tuesday night. The speaker was forced to pull his bill from the floor ahead of a planned Wednesday vote in the wake of the unimpressive score. The score CBO gave Reid's bill makes passing Boehner's bill -- which every major Tea Party group has deemed it insufficient -- more challenging for the Republican leader. Reid's plan includes no tax hikes or additional revenue, a demand Republicans have stuck to.

The scoring is anything but exact, however. Republicans often argue that tax cuts should be scored "dynamically" -- that the government should assume that greater tax revenue will flow into the coffers as a result of the economic stimulus provided by the tax reductions. The CBO does not embrace dynamic scoring, and so does not calculate the depressing effect that cutting spending could have on the economy and therefore on tax revenues. If the spending cuts tank the economy, in other words, the attempt at deficit reduction could have a drastically different result, and even increase the debt.

Two major differences account for the diverging scores given to Reid and Boehner's plans. First, Democrats get credit for more than a trillion in savings by winding down the wars in Iraq and Afghanistan. Wisconsin Rep. Paul Ryan's GOP budget assumed the same savings, but Boehner's does not.

Second, Boehner was only attempting to find a trillion and change in cuts so that the debt ceiling would be raised by an equal amount, thus forcing a brand new debt-ceiling showdown at the height of the election. Reid's plan would raise the debt ceiling until 2013.

Both Reid and Boehner's plans would created a super committee -- or Super Congress -- made up of legislators from both parties and both chambers that would have the power to write laws and send them directly to Congress for a fast-track, up-or-down vote that could not be amended.

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Comments

[eddiethekid]

11:37 PM on 07/30/2011

Although the article didn't go into specifics, I understand that Harry Reid's plan didn't touch social security, medicare, or medicaid, which is good for all Americans, except the right-wing nuts in Washington, D.C. Unfortunately, they get to vote so there won't be any long-term agreement, and they'll have to settle for a short-term lifting of the debt ceiling. This will continue until the November 2012 election, at which time the republicans will stop playing obstructionist.

[cbrepo]

09:05 PM on 07/30/2011

A deal wiil be struck, but it will not fix anything. The clowns in Washington will keep spending. Why has no one mentioned cutting all the money we send out of this country called foreign aid? Seems like we should aid ourselves first. Then how about all the money spent on people who here but are not supposed to be, and the money they send out of the country to their families? Eliminate that and use it for people who deserve it that are real citizens.

[politicky]

10:47 PM on 07/29/2011

" greater tax revenue will flow into the coffers as a result of the economic stimulus provided by the tax reductions. "

hijole, these dorkwads sound like parrots with that one

[lfbirk]

11:11 AM on 07/29/2011

Ok one more time...When Reid gets through with his plan it will be FUBAR.

[Charlotte Dwyer]

01:02 PM on 07/28/2011

I am appalled by the idea of our government representatives trying to establish a "SUPER CONGRESS" and one that would have power to override any decision making policy our present government has. These representatives have a job!.. They should be able to do their job in a responsible and intelligent manner rather than PASS THE BUCK. I really no longer trust anyone in government. Where did we get these poor excuses for our leaders? Oh, yes, the majority of citizens voted for them. You know why? They were not paying attention to what was happening in our country. Wake up America. Charlotte Dwyer, Western MA

[Sumsanity]

12:03 PM on 07/28/2011

I am not going to borrow $500 bucks and spend it. Wow. I just "saved'" $500 bucks. Didn't I?
NO. I didn't CUT anything out of my budget. I didn't get further out of the red and closer to a balanced budget but so what? It sounds good, doesn't it?

[AyeChart]

08:47 AM on 07/28/2011

An ultrashort history of CBO estimates of liberal plans: "Medicare, the program for the elderly, was supposed to cost $12 billion by 1990 but instead spent $110 billion. The costs of Medicaid, the program for the poor, have exploded as politicians like California Democrat Henry Waxman expanded eligibility and coverage. In inflation-adjusted dollars, Medicaid cost $4 billion in 1966, $41 billion in 1986 and $243 billion last year. Rather than bending the cost curve down, the government as third-party payer led to a medical price spiral." --Ed, WSJ.com today

[treasuredtrophie]

07:55 AM on 07/28/2011

Money from the war is not making real cuts. Cut OB and his expensive vacations. 500 staffers 200 sewcret service 8 doctors all got to go to Spain for the Sumitt G meeting. Now there is a waste.

[mbazid]

08:30 AM on 07/28/2011

Really? REALLY?

[VictorLudorum]

05:06 AM on 07/28/2011

The is more bribe money at stake then the affairs credibility.

[modernman55]

02:38 AM on 07/28/2011

Ok the dems caved in, there are the fat spending cuts the GOP wanted. Is it over?

[crabbyoldart]

02:27 AM on 07/30/2011

Not yet - but the question ought to be....if the tax breaks have been left in place, where are the jobs....jobs....jobs?? Because when one has a job, one can buy food, an automobile, telephone, gasoline, school clothes/books/pencils....pay more taxes....jobs are the question...where are the jobs? And I don't care which party comes up with the answer - I only know that the party that comes up with jobs for Americans will win the next election - why don't our congressional representatives understand that? (oh, a second question)

[Bill Walker57]

12:29 AM on 07/28/2011

NO SUPER COMMITTEE OR SUPER CONGRESS, We don't want a select few to be able to pass laws with the power that they are trying to get hold of

[Olderandwiser55]

11:51 PM on 07/27/2011

The last five Democratic Presidents, Clinton, Carter, LBJ, JFK, and Truman all reduced the debt, and one has to go back sixty years to find a Democratic President who, facing the Great Depression and World War 2, allowed the debt to increase. On the other hand, the last four Republican Presidents, GW Bush, GHW Bush, Reagan, and Ford all oversaw an increase in the country’s indebtedness. It has been more than thirty years since a Republican President left office (albeit in a scandal) having reduced the National Debt. In the last few decades, somewhere along the way, the Republican Party has become the Party of fiscal irresponsibility.

http://www.angrybearblog.com/2007/12/republican-party-and-national-debt.html

[DUSAA-1775]

06:40 AM on 07/28/2011

I am trying to recall democrat presidents.. Didn't obama and the democrat congress and increase the debt by $4 trillion?...It was quite awhile ago, but certainly after Truman...

[treasuredtrophie]

07:51 AM on 07/28/2011

and in only 2 1/2 years new record. While increasing unemployment, Houses worthless, Gas and Food way up good job OB.

[mbazid]

08:34 AM on 07/28/2011

Over half of that is a result of Bush
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/01/AR2010080103287.html

[cuz0311]

10:16 AM on 07/28/2011

The (D) were the majority in Congress all but 4 of those 60 years and it was that 4 years of (R) rhat Congress balanced the Budget. (Gingrich/Contract with America).

[Olderandwiser55]

11:26 AM on 07/28/2011

No, that's not true. Pure propaganda....while it might be true to say "republicans didn't have the majority the majority of the time", what is true is that "the majority of the time, congress was split between the parties" Start with the truth....please. I don't understand why we can't at least do that.

http://uspolitics.about.com/od/usgovernment/l/bl_party_division_2.htm

Americans seem to prefer that the checks-and-balances envisioned by the founders be facilitated by having different parties control Congress and the White House. Contrary to popular belief, most of the time (in modern political history) Congress and the President are at odds; that is, most of the time the same political party does not control the White House, the Senate, and the House of Representatives. Only 10 times (20 years) since 1945 have both branches of Congress and the Presidency been controlled by the same party.

[Jaya Santhan]

09:32 PM on 07/27/2011

It is admirable that we are finally making cuts by reducing the spending on the wars in Iraq and Afghanistan. No new taxing is a feasible plan if we can stick to this way of reducing debt. It would be interesting to know if this "Super" Congress will also play an active role in stimulating the economy by making sure that reduced taxation and other extra benefits are given to businesses that stimulate our homeland economy in a positive manner. This includes creating new jobs and self-sufficiency here in the USA.It is also imperative that we follow up on businesses that are already established here and to see if they are actually hiring Americans for their business ventures.

[DUSAA-1775]

09:16 PM on 07/27/2011

Reid's proposals for cuts are really nothing but smoke and mirrors and the old kick the can down the road game.
Why didn't Reid claim a trillion dollar savings by not invading Belgium? The budget cuts I have seen from anyone are nothing but proposed spending reductions that they promise will kick in some time in the future.
We have a natl debt of 14.3 trillion, with annual deficits of 1.3 trillion and our politicians think that the sheeple will believe they have done something if they propose to maybe save $220 billions a year maybe in the future?

[splintercottage]

12:10 AM on 07/28/2011

Yeah and Boehners were worse. The trouble hasn't been not invading Belguim but invading Iraq. I'm tired of all this frat boy game playing crap. The debt Ceiling has to be raised to pay for wars that actually took place . all the rest is academic. Look at the gap between the rich and poor in the USA. The super rich won't pay taxes and the poor can't. And all the games are being played that can only beeifit those with credit default swaps and other cons. Raise the debt and we can try to sort this out together or rest simply doesn't matter. Either you have millions and it doesn't matter or this foolishness could increase your mortgage payments and ya loose your home. Thats the real Deal.

[Billl]

09:01 PM on 07/27/2011

Real healthcare reform would save more money than all of these pretend proposals.

Having two systems competing for patients; one public dispensing all government funded care for free through government hospitals and paid for by a national sales tax instead of insurance and the other private receiving no government funding, could save as much as $1trillon annually form the $2.6 spent last year on healthcare.

No one would be forced to buy insurance and employers and states could eliminate all healthcare hassles and costs.

Using government's low cost advantages to fix healthcare would save lives and enough money to restore sanity to every State's and the Federal Government's budgets.

Why won't the President or even one legislator, AARP representative, union or company president, media power house or Huffington Post ask for hearings on how governments proven low cost advantages could save lives and enough money annually to rapidly restore sanity to our financial woes?

[crabbyoldart]

02:45 AM on 07/30/2011

Have you ever seen the lobbying budget and PACs for insurance? Follow the money - you will find out why no one ever questions private health insurance....an incredible force that keeps all of us without jobs, health deficient - seriously, you are right...but follow the money - it tells the tale of Washington's lobbyists who under mind democracy.