House Republican leaders briefed members on a comprehensive deficit reduction plan Monday afternoon that would raise the debt ceiling and cut spending by up to $3 trillion over ten years without increasing taxes. The plan calls for a two-tiered approach, as follows:
Step 1:
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Authorizes a debt-limit increase of about $1 trillion, giving the government sufficient borrowing authority until February or March 2012.
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Imposes statutory caps on discretionary spending over ten years that would yield about $1.2 trillion in savings. Failure to abide by these caps would trigger automatic, across-the-board reductions.
Step 2:
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Establishes a joint committee of Congress, comprising 12 members (three from each caucus), the co-chairs of which would be appointed by House Speaker John Boehner (R., Ohio) and Senate Majority Leader Harry Reid (D., Nev.). The committee would be instructed to come up with between $1.6 trillion and $1.8 trillion in additional deficit reduction — presumably through entitlement reform* — by a target date in late November. A final proposal would need just seven votes to proceed to Congress. Both chambers would then hold up-or-down votes on the proposal — no amendments or filibusters — by December 23, with only simple majority required for passage.
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If the committee’s plan passes both chambers, the president would be authorized to request an increase in the debt ceiling of up to $1.5 trillion, which would then be subject to a “resolution of disapproval” by Congress in a process that would mirror the one outline in the proposal put forward by Senate Majority Leader Mitch McConnell (R., Ky.).
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If the committee fails to produce an agreement, there would be no automatic trigger mechanisms to impose cuts. Congress would have to proceed through regular processes.
In addition to these two steps, the plan would require both chambers to vote on a balanced-budget amendment to the Constitution sometime after October 1. The full text of the legislation will be posted online later today, and GOP leaders hope to vote on the bill as soon as Wednesday. A senior GOP aide said he was optimistic that the plan could pass both chambers. “We believe this is a very credible plan that the Senate will have a very hard time rejecting,” the aide said, hinting that it was very similar to the framework being discussed by congressional leaders over the weekend, but was rejected by the White House.
* The special committee could, in theory, consider revenues in its proposal, but a GOP aide notes: “We appoint members to the committee and we’re not appointing any Republicans who will vote for tax hikes.”
"The committee would be instructed to come up with between $1.6 trillion and $1.8 trillion in additional deficit reduction ..."
Great. Another committee to study something.
Reply to this commentLinkReport AbuseSo we will have a committee appointed by the Debt Ceiling committee to report to the congress which can refer to a committee to save money?
Reply to this commentLinkReport AbuseWell--I don't see any of Dear Leader's precious tax hikes in this.
Reply to this commentLinkReport AbuseI cannot reconcile this notion of a "resolution of disapproval" with the Presentment Clause (Art. I, Sec. 7).
Reply to this commentLinkReport AbuseWhat those caps are, and how they are to be enforced, is more than a minor detail...
Reply to this commentLinkReport AbuseThis looks pretty bad to me.
In Step 1, Obama gets a $1 trillion increase. The GOP gets "statutory" caps, but that's meaningless. Congress can't pass a law that Congress can't repeal. So any budget that blew through the caps would act as a repeal.
In Step 2, the committee can propose cuts, but there is nothing to guarantee cuts. The committee can fail to reach an agreement, or either chamber could fail to pass it. Either way, the GOP will have failed to cut spending.
That will leave us right back where we are now, except Obama gets a $1 trillion debt increase and the GOP gets nothing.
Reply to this commentLinkReport AbuseThe GOP gets a ton out of this proposal. They get at least four big wins here:
1) This is essentially a short term fix meaning that this issue will be back before the election. How quickly it comes back is up to the President and this will be a weight around his ankles for next 18 months unless the "Step 2" committee comes up with a long term fix in which case its still a win. The fact that it comes up again before the election is a political win (not a fiscal one) but it's still a big win. If the "Step 2" committee comes up with a big solution, it's a win because it was a GOP plan that led to it.
2) It avoid immediate default and calms the markets down. If this passes the GOP can claim to have put forward 3 concrete proposals with significant detail compared to the Democrats zero.
3) It gets a vote on the BBA which is hugely popular both within the Republican Congress and with the public at large. Further, it gets that vote within a year of a major election where there are quite a few moderate Democrats who are vulnerable at least partially on these issues. Either they vote for the BBA (and help it pass) or they vote against it and give their election opponent a giant weapon.
4) They get to keep, and campaign on, their promise about no new taxes.
Reply to this commentLinkReport AbuseIt's not about what the GOP gets out of this. It's what the people get, which is a $1 trillion debt ceiling increase. It remains to be seen whether this will provide electoral cover for the Republicans.
Reply to this commentLinkReport AbuseI appreciate your point, but I believe it proves too much. Statutory caps are, I think, the very strongest tool available in the toolbox for unwinding the present crisis. If one accepts that the theoretical inability of one Congress to bind another means that not even statutory caps should be accepted as "cuts" offsetting a debt increase, then there cannot be any cuts that could offest a debt increase, except for cuts in this year's budget. Since it's generally regarded as impossible to get enough cuts out of this year's budget, that would mean no deal is possible.
As for the cuts the committee is supposed to come up with, the beaty of this deal is that the committee has to come up with them BEFORE the corresponding debt ceiling. No more bag of magic beans... Not only does the committee have to come up with specific cuts, Republicans will have the chance to review them and make sure they're not fake cuts (like ending appropriations for things that were one-time expenditures anyway, like they did in April). If they're not satisfied with them, then they refuse to vote for the debt increase next year, and we get to have this fight all over again, in the midst of a Presidential election.
On the whole, I like this plan. It's not a complete rout of the Democrats, but it's as good a deal as I can imagine. Unless you're very confident that Democrats would be blamed for a government shut-down this time, it's hard to think up a better deal that Demcrats would have any incentive to agree to--and even if you do, you'll still get your chance for that next year.
Reply to this commentLinkReport AbuseThis is a win for the GOP. It's a reasonable plan and puts the onus on the Democrats. Default, if it happens, is now Obama's fault.
Reply to this commentLinkReport AbuseThe Democrats want default. I think that is obvious now.
Reply to this commentLinkReport AbuseProbably as good as we can hope for given Republicans only control the House. Expect tremendous pressure on the Republican members of the committe to "evolve" once they've been appointed.
Reply to this commentLinkReport Abuse$1 Trillion in debt ceiling raise - all in 6 months.
Followed by
$120 billion in cuts each year for 10 years.
followed by an additional
$160 to $180 in cuts for 10 years.
Equals $380 to $400 Billion in cuts from a $1.5 Trillion deficit.
And then adding another $1.5 Trillion in debt spending for one year.
Hmmmmmmm
Doesn't sound very fiscally conscious but I guess you have to start somewhere. Can this at least have the appropriate PR to go along with it on the side of the GOP?
Reply to this commentLinkReport AbuseSpeaking of fiscally conscious -
It's $280 to $300 billion a year for 10 years. I guess I was overcome by giddiness - sorry.
Reply to this commentLinkReport AbuseWait a second. The government is going to spend another $1 TRILLION that it does not have in 8 months while reducing spending perhaps by only $1.2 TRILLION in TEN YEARS?!
Even if the $3 TRILLION 10 year target is agreed to, what do the actual revenue and spend profiles look like? How much more debt will be loaded on in the meantime? Will the out-year debt include another $TRILLION to fund perpetual Wars to Nowhere?
The Republicans hate taxes, but they hate real spending cuts even more. They should be arguing meat axe cuts to the American people to balance the budget if they really mean it.
But they're going to hide behind the illusory Balanced Budget Amendment as a lame rationalization for avoiding standing on principle.
Democrats, Republicans - doesn't matter. American is going to h*ll in a handbasket.
But all the Beltway Reptiles like Obama, Rahm Emanuel, Billy Tauzin, Chris Dodd, Judd Gregg, John Breaux, the senior Hill Staffers, the Pentagon Cronies, ad infinitum will walk away from the conflagration rich...
Reply to this commentLinkReport AbuseI guess that anything that passes that avoids tax increases would be a victory for the Republicans.
Look guys, as much as I and you would love to reform Washington D.C. right now in this instant it just isn't going to happen. Brit Hume wisely pointed out that there still is a budget-battle for 2012 and 2013 to fight for this Congress. I we get some cuts here, some later from this deal, some in the budget/CR, then we're soon starting to talk a stream.
Every penny counts
Reply to this commentLinkReport Abuse"Brit Hume wisely pointed out that there still is a budget-battle for 2012 and 2013 to fight for this Congress."
No offense Libertas, but it's always "the next battle" for the establishment types. We heard the same darn thing about the debt ceiling when Boehner caved on the CR.
The bottom line is Washington simply doesn't have the wherewithal to deal with the financial condition the country now faces.
Reply to this commentLinkReport AbuseMarco - you have half the congress and the executive branch who point blank will do nothing without political cover. This sounds about what I expected after Obama's silly presser on Friday. This gives us an opportunity to talk about spending out in the open. The dems already have lost an Ark Senate seat. Watch the retirement announcements continue.
Reply to this commentLinkReport AbuseI like it except for the committee. Hey, Congress:you ARE the committee.
Reply to this commentLinkReport AbuseAgree...but (hopefully) this will force the cuts into the open for view, which they avoid by passing massive bills with hidden price tags.
This will give the GOP more talking points in this their vs our cuts into 2012.
I doubt Dear Feckless will sign on to this one due to the two tier approach. He cares nothing about debt, but he does care about a second term. His idea of bipartisan is golfing with Speaker Boehner.
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