Reid Budget Plan Would Save More Than Boehner, Less Than Touted, CBO Says

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Registered: 03-18-2000
Reid Budget Plan Would Save More Than Boehner, Less Than Touted, CBO Says
Wed, 07-27-2011 - 11:46am

Less than a week from a potential U.S. default, Congress’s budget scorekeeper said rival House and Senate debt-cutting plans fall short of savings goals as lawmakers struggled to find a compromise and rework proposals.

House Speaker John Boehner’s plan would save just $850 billion rather than the advertised $3 trillion, forcing him to make revisions and postpone a vote scheduled for today after fiscal conservatives raised concerns.

Senate Majority Leader Harry Reid has scheduled a news conference at 11:45 a.m. Thus far Republican leaders have scheduled no news conference.

The non-partisan Congressional Budget Office said Reid’s plan would cut $2.2 trillion over 10 years, shy of the $2.7 trillion target. The savings fall below the $2.4 trillion figure needed to meet Republican demands that a debt-limit extension be accompanied by an equal amount of savings. President Barack Obama is insisting on a debt-limit increase large enough to last through the 2012 elections.

“We’re working through it,” said House Rules Committee Chairman David Dreier. Among opponents, “some have said they’ve changed their position, some have said they’ll rethink their position, so I’m encouraged.”

Dreier, a California Republican, said he expects a reworked version to come before his panel today, setting up a vote by the full House tomorrow.

Treasuries pared losses today as Pacific Investment Management Co.’s Mohamed A. El-Erian said there will be “massive consequences” if the U.S. loses its AAA credit rating. The benchmark 10-year note yielded 2.96 percent. Stocks fell also, pulling the Standard & Poor’s 500 Index lower for a third day.

Adjusting the Bill

At a closed-door meeting of House Republicans today, Boehner told lawmakers he is still adjusting his bill, said lawmakers who attended.

There was some laughter and clapping coming from the room. As they left, some lawmakers said Boehner is shoring up backing.

“Support for his proposal is growing,” said Representative Lamar Smith, a Texas Republican.

At the session -- the third such meeting in 24 hours -- Budget Committee Chairman Paul Ryan explained that CBO estimated less savings than was promised because it used a different starting point than leaders anticipated, said Representative Scott Garrett of New Jersey.

Representative Tom Reed, a first-term Republican from New York, said he was up through the middle of the night trying to decide how he’ll vote on Boehner’s proposal. He said he decided around 4 a.m. to line up with the speaker after saying yesterday he would oppose it.

‘A Firm Yes’

“At this point in time, I’m a firm yes,” Reed said. “We’ve been looking at this real hard. This has been a very stressful period of time. It’s not exactly what I’m looking for, it’s not what we came to Washington to do, but it’s a step in the right direction.”

The Reid proposal saves more than $1 trillion through what Republicans call a budget gimmick that takes advantage of a quirk in how the CBO is required to forecast war costs, according to the analysis.

“We are glad Congress’s budget referee agrees that the Senate bill cuts the deficit by $1.3 trillion more than Speaker Boehner’s bill,” said Reid spokesman Adam Jentleson. “It becomes clearer by the hour that the Senate bill is the only true compromise in Congress.”

Both Reid, a Nevada Democrat, and Boehner, an Ohio Republican, proposed creating a special budget-cutting committee to help find cuts, for which the CBO refused to credit any savings because it couldn’t predict whether or how much the panels would eventually agree to cut.

Talks With Obama

Boehner devised his own plan after his debt-reduction negotiations with Obama and congressional Democrats broke down.

Adding to Boehner’s woes, Republican presidential candidate Michele Bachmann, a Minnesota congresswoman who has said she won’t back raising the debt ceiling, opposed Boehner’s plan. “The premise is wrong that we begin with increasing the debt ceiling,” she told reporters yesterday in Ankeny, Iowa.

Three investment firms -- BlackRock Inc., Loomis Sayles & Co. and Franklin Templeton Investments -- said the U.S. faces losing its AAA credit rating as the debate continues.

“Our guess is, when push comes to shove, the debt ceiling will be raised,” said Bob Doll, chief equity strategist at New York-based BlackRock, which manages $3.66 trillion. “What goes along with that is very difficult to tell, and that’s why the threat of a downgrade still exists,” Doll said in an interview today on Bloomberg Television.

Richard Durbin of Illinois, the Senate’s second-ranking Democrat, called the debt crisis “a self-inflicted wound.”

“Rating agencies have told us it’s not only a long-term debt, but the fact that you are lurching day to day, week to week, with no resolution on the debt ceiling” that is leading to a potential downgrade of the AAA credit rating, he said on Bloomberg Television today.



iVillage Member
Registered: 03-18-2000

"Tea Partiers "hobbits'!"

LOL Speaking of McCain watch the video & read the article at this link.......

McCain erupts: Conservatives are lying to America



iVillage Member
Registered: 04-07-2002
I am just SOOO sick of the politics!

However, while not a supporter of McCain, I sure did get a kick out of him calling Tea Partiers "hobbits'! ROTFLOL!


iVillage Member
Registered: 03-18-2000
Speaker Boehner's Disgrace

Seldom have we witnessed a more dishonest speech [4] in prime time than that delivered by House Speaker John Boehner last night on the debt ceiling crisis. "The sad truth," he declared, "is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen."

The sad truth is that statement is a bald lie, applied to a president who, far from wanting a "blank check," has endorsed Senate Majority Leader Harry Reid's plan for an unconscionable $2.7 trillion in over ten years from discretionary spending as ransom to Republican threats [5] to blow up the economy by not raising the debt ceiling.

In a speech cobbling together stale conservative talking points, Boehner claimed to be "Speaker of the whole House," while talking for and to its lunatic right-wing fringe. In doing so, Boehner introduced Americans into the funhouse hall of distorted mirrors that is the current conservative delusion.

The "national debt," the Speaker tells us "has gotten so out of hand it has sparked a crisis without precedent in my lifetime or yours." With interest rates on American bonds near record lows, this is a crisis not recognized by investors across the world.

So where did this debt come from? No mention of the debts racked up by the Bush administration and Republican congresses with two unfunded wars, repeated tax cuts larded to benefit the top end, and a prescription drug bill that was written by the drug company lobby. No mention of the financial wilding by Wall Street that eventually blew up the economy, causing the worst recession since the Great Depression.

No instead, Boehner says the problem begins with President Obama and a "Washington spending binge," composed of the stimulus plan and the health care reform. But in reality, as Boehner knows, the recession – which lowered revenues and raised spending as workers lost jobs and started collecting unemployment and food stamps -- and the Bush wars and tax cuts are the biggest contributors to the deficit. Our broken health care system is the biggest contributor to long term debt projections. The stimulus plan added little -- too little -- to the deficits. And as the non-partisan Congressional Budget Office scores it, the health care reforms offer large deficit savings as the measures built in to cut waste and raise taxes kick in.

This ersatz crisis began when the Republican zealots in Congress decided to use the debt ceiling – a procedural oddity routinely passed in past years (18 times under Reagan alone) – to hold the economy hostage to force deep cuts in Social Security, Medicare, Medicaid and domestic spending while opposing the slightest mention of closing tax loopholes, much less raising taxes on the rich. Yet Boehner claims the "crisis atmosphere" was created by the president. Even Orwell's Ministry of Truth designed to peddle disinformation would blush at that one.

But never fear, the Speaker reassures, "there is no stalemate in Congress. The House has passed a bill to raise the debt limit with bipartisan support. And this week, …we will pass another bill – one that was developed with the support of the bipartisan leadership of the US Senate," that the Speaker expects to pass the Senate.

Wouldn't you love to know what he is smoking? The "bipartisan" bill in the House – the brutal "Cut, Cap and Balance" act – got 240 votes, five of which were Democrats. As EJ Dionne points out [7], the opposition was more bipartisan than Boehner's majority, with nine Republicans joining 181 Democrats against. And it was defeated in the Senate. The Boehner two step that he will push through the House this week - again without Democratic support – is likely to fare no better in the Senate -- if it can get out of the House.

The President, Boehner said "can't take 'yes' for an answer." This risible comment from the leader of Republicans who have said no to the wrong-headed offer of $2.7 trillion in cuts in discretionary spending over 10 years (which will cut spending on education, the environment, food safety, affordable housing, cops on the beat and much more), plus a promise to set up a committee with extraordinary power to push cuts in Social Security, Medicare and Medicaid in exchange for LOWERING top tax rates and closing loopholes.

Boehner rejects what can only be termed an abject and unacceptable surrender by Senate Majority Leader Harry Reid because Republicans want only a six month extension of the debt limit, so they can play this game again prior to the 2012 election, and they oppose any consideration of increased tax revenues.

Utterly lost in this is the debate the country needs. Boehner says that cutting Social Security and Medicare benefits, slashing government purchases and laying off workers in a time of mass unemployment will somehow boost the economy. In fact, as Britain has shown, as states that have started deep layoffs have shown, austerity bites --cuts in government spending cost jobs. And with businesses lacking not confidence but customers, the recession will worsen.

What we need is a leader who will challenge this nonsense, lay out a serious program to put America back to work, and to make the investments and policy changes vital to rebuilding the country. We need a plan not simply to put people to work now, but a strategy to revive manufacturing while standing up to China and the mercantilist nations, capture a lead role in the clean energy revolution, and repair the carnage being done to our schools and universities. This – as the People's Budget by the Congressional Progressive Caucus has shown [8] – can be achieved and paid for with progressive tax reforms and new priorities, starting with bringing our unfunded wars to a close.

Instead of an alternative that might help people understand how we get out of the mess that we are in, we get a capitulation. The president adopts the full conservative mantra about deficit reduction. The Senate Majority leader offers up deep cuts without any increased taxes. But even capitulation is not enough for the tea party zealots in the House who won’t let the Speaker accept a deal beyond his fondest dreams six weeks ago. So Boehner straightens his tie, furrows his brow, and comes before Americans to deliver an utterly shameless and dishonest speech. Americans, in need of work and hope, have seldom been so badly served.

Go to your legislator’s local office or call the Washington office. Make the message simple. Lift the debt ceiling, protect Social Security, Medicare and Medicaid. Tell your legislator you will hold him or her accountable for any deal that exacts sacrifice from the poor and the elderly while exempting the rich and powerful.

The most striking aspect of this "negotiation" is how far removed both sides are from the position of the vast majority of Americans. Poll after poll makes clear, Americans in overwhelming numbers want Social Security and Medicare and Medicaid protected from cuts. Most Americans support raising taxes on the rich, on the big corporations, ending big oil subsidies, lifting the cap on payroll taxes for Social Security, taxing big banks for the mess they created. Americans want jobs and growth.