After an unfavorable analysis of John Boehner's proposal, the Senate majority leader also comes up short on cuts
After an adverse CBO scoring complicated the already difficult task House Speaker John Boehner (R-Ohio), faces rounding up GOP votes for his bill to raise the debt ceiling, Senate Majority Leader Harry Reid's alternative won a comparatively favorable score on Wednesday.
In a morning report, the Congressional Budget Office scored Reid's debt-reduction plan, said to offer $2.7 trillion in spending cuts over 10 years, as actually cutting closer to $2.2 trillion, according to the analysis.
Wednesday's CBO analysis comes a day after a competing plan offered by Boehner also came short of its advertised spending cuts.
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The shortfall matters. The $14.3 trillion debt ceiling must be raised by an estimated $2.4 trillion to avoid having to raise it again before the November 2012 election.
Democrats do not embrace the GOP demand to at least match the amount of debt ceiling increase with deficit cuts. But a bill that can pass the Republican House probably needs to.
Reid indicated Wednesday morning that he would tweak the plan to achieve $2.4 trillion in savings as he paves the way for what what he hopes will be a deal with Senate Minority Leader Mitch McConnell (R-Ky.). Reid has not yet filed cloture on the bill, allowing him to retool it to get more votes.
Reid said updating it requires "minor tweaks" that "are very simple to do." Democrats originally left out savings they hope to win from changes to Fannie Mae and Freddie Mac due to concern that that provision constitutionally must originate in the House.
Because the Reid and Boehner plans are the only options now on the table, the immediate impact of the score was to further diminish Boehner's plan, which CBO scored as $850 billion in a decade, forcing House Republicans to rewrite the bill.
The result is lost legislative leverage in a faceoff with Reid over whose proposal will form the framework for a potential compromise measure that could pass both chambers. House GOP leaders lost ground Tuesday night when they were forced to delay a vote on Boehner's plan until Thursday.
Though Republicans have derided Reid's bill as gimmick-laden, it is better suited for the quirks of CBO scoring. Boehner's two-step bill puts off major savings until 2012. And Reid's bill under CBO baselines can claim $1 trillion in assumed savings from winding down of wars in Iraq and Afghanistan. That also allows the plan to claim further interest savings.
The Reid plan claims $1 trillion in cuts that would come from war spending, which - while technically legitimate, because the plan officially caps that spending and the Boehner plan does not - takes a big bite out of Democrats' claim that their plan saves $1.3 trillion more than the Boehner plan does. With interest savings, the Reid plan saves closer to $1.25 trillion through war spending, which largely accounts for the bottom-line difference between the plan.
Everyone expects war spending to go down anyway; the Boehner plan simply does not account for it - or force it. But CBO made sure to include expected savings from winding down the wars in Iraq and Afghanistan in the baseline it used to score the Boehner plan in order to score it fairly. In the Reid plan, that $1 trillion in war savings is in play, but Republicans charge that Reid is being disingenuous by taking ownership of those savings.
"This report shows the Senate plan for what it is: a grab-bag of gimmicks that gives the President a blank check," Boehner spokesman Michael Steel said. "In contrast to the bill House Republicans have offered, the Senate Democratic bill counts as 'savings' a trillion dollars in war money that would never have been spent - and on top of that, slashes the defense budget in a manner that would hurt our men and women in uniform in a time of war."
Steel also pointed out that, by that metric, the Reid plan would raise the debt ceiling by more than it would cut spending.
"In reality, the Reid plan would only save taxpayers about $1 trillion while giving the President the largest debt limit increase in history," Steel said in a statement. "Despite previous claims, it significantly falls short of the requirement that we cut more than we increase in the debt limit."
Image credit: Jim Young/Reuters