John Boehner And Harry Reid Release Competing, Mostly Incompatible, Debt Plans

John Boehner and Harry Reid introduced their debt plans. Now, where do we go from here?

Speaker John Boehner and Senate Majority Leader Harry Reid released the details of their respective plans to reach an agreement on spending cuts that would allow Congress to pass an increase in the debt ceiling by August 2nd. As suspect, the two plans, and any chances of compromise, couldn’t be further apart. In fact, the only thing the two plans seem to have in common is that neither one includes tax increases of any kind, an indication that the GOP has won the fight on that issue it would seem.

John Boehner was first up with his plan, and Ezra Klein provides a summary:

•     Cuts that exceed the debt hike. The framework would cut and cap discretionary spending immediately, saving $1.2 trillion over 10 years (subject to CBO confirmation), and raise the debt ceiling by less – up to $1 trillion.

•     Caps to control future spending. The framework imposes spending caps that would establish clear limits on future spending and serve as a barrier against government expansion while the economy grows.  Failure to remain below these caps will trigger automatic across-the-board cuts (otherwise known as sequestration).

•     Balanced Budget Amendment. The framework advances the cause of the Balanced Budget Amendment by requiring the House and Senate to vote on the measure after Oct. 1, but before the end of the year, allowing the American people time to build sufficient support for this popular reform.

•     Entitlement Reforms & Savings. The framework creates a Joint Committee of Congress that is required to report legislation that would produce a proposal to reduce the deficit by at least $1.8 trillion over 10 years. Each chamber would consider the proposal of the joint committee on an up-or-down basis without any amendments.  If the proposal is enacted, then the president would be authorized to request a debt limit increase of $1.6 trillion.

Senator Reid, meanwhile, is circulating a plan that has purportedly larger cuts and only requires one increase in the debt ceiling:

— $1.2 Trillion in Discretionary Spending Cuts. The $1.2 trillion in discretionary spending cuts include both defense and non-defense spending. Before Speaker Boehner broke off talks with the White House on Friday, he had already agreed to $1.2 trillion in discretionary spending cuts.

— $100 Billion in Mandatory Savings. The proposal includes $100 billion in mandatory savings that were negotiated by Democrats and Republicans participating in the negotiations led by Vice President Biden. These savings will not impact Medicare, Medicaid, or Social Security benefits in any way.

— $1 Trillion in Savings From Winding Down the Wars in Iraq and Afghanistan. Winding down the wars in Iraq and Afghanistan will save $1 trillion. Paul Ryan’s budget also included this savings in its deficit reduction calculation, which was supported by 235 House Republicans and 40 Senate Republicans.

— $400 Billion in Interest Savings. The package includes $400 billion in interest savings, $220 billion from the discretionary spending cuts and $180 billion from winding down the wars in Iraq and Afghanistan. Both the Ryan budget and the House Cut, Cap and Balance plan similarly included interest savings in their total calculation.

— Establishes Joint Congressional Committee to Find Future Savings. In addition to $2.7 trillion in concrete savings, the Senate package will establish a joint, bipartisan committee, made up of 12 members, to present options for future deficit reduction. The committee’s recommendations will be guaranteed an up-or-down Senate vote, without amendments, by the end of 2011.

It’s probably not appropriate to call this the “Reid Plan” anymore, since ABC’s Jake Tapper reports that the White House has thrown its weight behind the idea:

Accusing House Republicans of walking away from deficit negotiations “after insisting that the budget be balanced on the backs of seniors and the middle class,” White House press secretary Jay Carney issued a statement embracing the deficit reduction approach of Senate Majority Leader Harry Reid, D-Nev., which he calls  “a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery.”

This part of Carney’s statement is interesting and likely to be the focus of how the White House and Democrats will attempt to spin this over the coming days:

Faced with the ‘my way or the highway,’ short-term approach of the House Republicans, Senator Reid has put forward a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery. All the cuts put forward in this approach were previously agreed to by both parties through the process led by the Vice President. Senator Reid’s plan also reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans, and, most importantly, it removes the cloud of a possible default from our economy through 2012. The plan would make a meaningful down payment in addressing our fiscal challenge, and we could continue to work together to build on it with a balanced approach to deficit reduction that includes additional spending reforms and closing tax loopholes for corporations, millionaires and billionaires

The question, of course, is where we go from here. It’s quite obvious that neither the Boehner Plan nor the Reid/White House Plan will be completely acceptable to the other side. Democrats will object, rightly I think, to the Boehner Plan’s two-tiered approach and the idea of revisiting the battle over raising the debt ceiling again in the middle of a Presidential election year. They also won’t like the idea of the Balanced Budget Amendment element, especially if it’s the version that the House GOP is pushing right now (which is, as I’ve noted, so fatally flawed as to be worthless anyway). Republicans are likely to jump on the Reid Plan’s $1 trillion in “war savings,” which is a form of projected spending “savings” that fiscal conservatives have criticized in the past and, I’m sure, they’ll say that the $1 trillion in discretionary spending cuts is made up of accounting gimmicks.

What we’ve got then are two plans, neither one of which has any chance of being passed by Congress and signed by the President absent significant concessions from both sides. Given how these negotiations have gone so far, I don’t see that happening. Instead, it’s more likely that the House will go through with a vote on its plan, which the Senate will reject, and then we’ll be back in the same position we are right now on Friday except we’ll only have about 72 hours before the August 2nd deadline hits. In other words, if this is what Congress spent its weekend working on then it has been a waste of a weekend, and it looks like we’ll be wasting a legislative week on more partisan posturing.

I’m waiting for Congress to prove me wrong, but I doubt they will.

 

FILED UNDER: Congress, Deficit and Debt, US Politics, , ,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. hey norm says:

    The two are certainly incompatible with each other, as you point out. What you fail to point out is that Boehner’s plan is incompatible with reality. A balanced budget amendment will never, ever, pass. It doesn’t even have the 2/3rds vote to get out of the Tea Party House.
    Reid’s plan on the other hand seems to be mostly comprised of things the so-called Republicans have already agreed to, or have already voted for in Ryan’s ridiculous exercise.
    I have a hard time seeing how the so-called Republicans can even justify wasting time voting on Boehner’s plan given the time-frame and jittery markets.

  2. Moosebreath says:

    The title of Boehner’s plan is quite a tell on his intentions: “Two-Step Approach to Hold President Obama Accountable.” In other words, it’s there to score political points, not to resolve actual issues.

  3. Ted says:

    What we’ve got then are two plans, neither one of which has any chance of being passed by Congress and signed by the President absent significant concessions from both sides.

    If Reid’s plan does not represent significant concessions from the Democrats, then what kind of a plan would?

  4. sam says:

    ‘Republicans are likely to jump on the Reid Plan’s $1 trillion in “war savings,” ‘

    Yeah, but, but, “Paul Ryan’s budget also included this [war] savings in its deficit reduction calculation, which was supported by 235 House Republicans and 40 Senate Republicans.”

    Not that a small thing like consistency will impede those asshats. And the end of the day, the Republicans look to have stuffed theyselves agin.

  5. Vast Variety says:

    Republicans have proven that they are willing to throw the country into utter fiscal calamity in order to force Obama and the Democrats to vote on the debt ceiling twice becuase they think it will hurt the Dems in the elections. Its disgusting and proves that they can not be allowed to to gain control of the Senate or the White House.

  6. Vast Variety says:

    @Ted: Nothing short of handing the GOP control of the Senate and White House apparently.

  7. mantis says:

    What we’ve got then are two plans, neither one of which has any chance of being passed by Congress and signed by the President absent significant concessions from both sides.

    The Democrats plan is full of concessions. The Republican plan has none. Republicans will accept nothing less than Democrats conceding the 2012 elections today or they will destroy the economy.

    There’s an extremely simple way to move forward here. Raise the debt ceiling. It would take a few minutes by voice vote. However, the hostage-taking Republicans can’t back down now, so I doubt that will happen. They’re itching to pull the trigger out of spite.

  8. Racehorse says:

    Please – give me Nixon any day of the week.

  9. Hey Norm says:

    Anyone else think that Boehner is going to cry during his response speech?

  10. Ron Beasley says:

    It doesn’t look like Boehner can get his bill past his own party.

    A coalition of Tea Party chapters and conservative lawmakers on Monday rejected the debt proposal put forward by Speaker John Boehner (R-Ohio), despite his efforts to sweeten the deal with provisions favored by his conservative base.

    The Cut, Cap, Balance Coalition, which boasts hundreds of Tea Party groups and more than 100 GOP lawmakers in its membership, is citing two provisions in Boehner’s proposal that amount to deal-breakers: its call for creating a Congressional Commission and its inclusion of a balanced budget amendment that, according to the group, is only for show.

  11. markm says:

    WHOA…..so much for those crazy Republicans “goin’ it alone”. Hmmph.

  12. Pug says:

    I’m waiting for Congress to prove me wrong, but I doubt they will.

    They won’t prove you wrong. I think default of the United States on its obligations is what’s coming. There is a significant part of the Tea Party and the Republican Party, people in positions of authority like Senators and presidential candidates, that want it, and they have the power to block any increase in the debt ceilng.

    We can now await the reaction of Wall Street and the bond markets.

  13. Rob in CT says:

    So wait, both plans are all cuts? No agreement in either plan that additional revenue is needed in the future? Or is the Democratic assumption that the Bush/Obama tax cuts will be allowed to expire on schedule? Over the GOP’s cold corpse. That only happens if the Dems win in 2012. So they’re giving up $1.3T in discretionary spending cuts (plus a committee, but I’m guessing that works about as well as Simpson-Bowles did) in exchange for… ? Oh, right, the debt ceiling gets raised so we avoid default, which should happen anyway. If the GOP agrees to it, which they won’t, apparently.

    Nice bargaining there, Dems, as usual.

  14. Muffler says:

    @hey norm: A balanced budget amendment is a problem agreed. I never fail to understand why the “constitutional conservatives” are always trying to change the constitution. I suppose they are afraid to stand up and do anything that makes Grover Norquist unhappy. I supports their pledge to Norquist is high than the oath of office.

  15. Muffler says:

    Quick edit: I meant : I suppose their pledge to Norquist is high than the oath of office.

  16. Rob in CT says:

    GOP: Hey, America, we should change our Consitution to make America work more like California. Whaddya say?