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Do the Boehner and Reid bills actually make trillions of dollars in cuts?

July 27, 2011 by  

Do the Boehner and Reid bills actually make trillions of dollars in cuts?

Both the upper and lower houses of Congress are currently considering bills to increase the debt limit and cut spending. The one in the House is sponsored by House Speaker John Boehner (R-Ohio), and the one in the Senate is sponsored by Majority Leader Harry Reid (D-Nev.). Both bills have come under fire from the Congressional Budget Office (CBO) for not actually delivering their respective amounts of promised cuts.

The Boehner bill has been taken off the floor so it can be tweaked to meet Republican promises that cuts will match or exceed the debt limit increase, dollar-for-dollar. The initial idea behind the bill, which heavily references the “Cut, Cap and Balance” bill that passed the House but was dead on arrival in the Senate, is to slash spending while only allowing a small debt limit increase. On its initial reading of the bill, the CBO estimated that it would reduce the deficit by $850 billion, while raising the debt ceiling by $900 billion, according to POLITICO.

The Reid bill is also being re-worked, because it was estimated by the CBO to cut $1.8 trillion, reduce the deficit by $2.2 trillion and raise the debt limit $2.7 trillion, according to The Washington Times. This bill, in its current incarnation, would be accomplished through a series of cuts and, unlike the Boehner bill, tax increases. However, some have argued, according to the article, that the Reid bill’s savings are not true savings, “because the Reid plan takes credit for cutting $1 trillion in war spending in Iraq and Afghanistan. Those savings can only be claimed if one assumes the U.S. engagement there will continue at full throttle for the next decade.”

However, at least one columnist is questioning whether either plan actually contains any real cuts, because of how each bill deals with discretionary spending authority.

“Discretionary spending authority — the amount government is allowed to spend each year — actually rises over the next 10 years. Under the Boehner plan, the 2021 cap is $1.234 trillion, or about $190 billion more than authorized for 2012. Under the Reid plan discretionary spending is capped at $1.228 trillion in 2021,” read a column for Salon. “So you might well ask, if the amount that Congress is allowed to spend goes up each year, how can either side claim savings of a trillion dollars or more?”

It turns out, in calculating budget projections, “planners assume a baseline in which spending rises at the same rate as inflation,” according to the column.

“‘Savings’ are calculated by subtracting what the government will spend with the cap in place from what the government would have spent if spending rose at the full inflation rate. Voilà! Spending, overall, continues to rise, even as a trillion or more dollars are ‘saved.’”

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  • Raggs

    The elite are manipulating the stock market as I have stated many weeks ago oblama has his hands in $billions of the stock holders pockets… oblama is making a killing off of this… harry reid and boehner both suck the kickbacks.

  • Cawmun Cents

    Somebody needs to call these jackasses bluff.To keep raising the debt is not an answer.It is sheer madness.What needs to be done is for everyone to be hurt by the fiscal irresponsibility of Washington.That way we know why we need to curtail such activity.Are the citizens of this nation going to sit idly by and let these politicos spend money our nation doesnt have on the books?Make them shut dowwn the useless organizations and agencies which leach off the public dole.
    Hello McFly!-CC.

  • Thinking About

    I am not sure what interest rate the US will have if allowed to default. This has to be a great consideration in decisions to default. This will mean more money will be spent in the future years no matter who should be president. This is a stupid move and all backing the default is not thinking with a full deck. This nation will destroy itself in making this stupid decision. The House is without leadership and the body who is responsible for sending the bill to the Senate. Apparently no one has ability to negotiate and this is a basic knowledge, Congress get smart for one time in your life, DO YOUR JOB!

  • malcolm1943

    The two bills as they stand at this time do not make any real cuts.
    The House bill as revised will cut 1Billion dollars in FY2012, meanwhile the gov’t. is spending at the rate of 200 Billion dollars a day! The Senate bill from Mr. Retard Reid will cut even less in FY2012. The morons running the house and senate don’t give a rats a** about the american people they only care about getting re-elected!!
    We the people would like to see the credit limit cut off completely, with no new borrowing just paying off what we owe. This means those exalted members of congress will have to cut their staffs, their committee staffs, their perks such as free mailing, get rid of depts. that the gov’t. shouldn’t be involved with in the first place such as health and human services, education, labor, commerce, USPS, etc.
    They would also have to stop subsidising projects such as green energy, oil exploration, farming, etc. Also foreign aid would have to be severely curtailed and only provided in limited amounts to countries that are not trying to destroy us and our way of life.
    All these things are possible, but not with the people currently in washinton.
    Sure these thigs will hurt us all in various ways but the hurt will heal quickly as this country becomes self sustaining with a really healthy economy. In the long run more people will prosper and enjoy the pursuit of life, liberty, and happiness.

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