Republicans, led by House Speaker John Boehner, and Democrats, led by Senate Majority Leader Harry Reid, came up with dueling plans today to raise the debt ceiling and significantly reduce the deficit.
The plans share some common elements, but the party leaders quickly denounced each others' proposals. The bottom line remains that Congress is still up against the clock to raise the debt limit -- the legal limit the U.S. is allowed to borrow -- before August 2. The Obama administration and many economists have warned of economic catastrophe if the debt limit isn't raised by then.
Here's a look at how the plans compare:
How much does it raise the debt ceiling?
House Republican plan: Less than $1 trillion immediately -- enough to last at least through the end of the year
Boehner's plan would allow President Obama to make a separate request for a $1.6 trillion increase later, if Congress passes a special plan, created by 12-member "Joint Committee of Congress," for additional spending cuts. In essence, this plan could re-create the entire debt ceiling debate.
Senate Democratic plan: Reid says his plan would allow Congress to raise the debt limit "through 2012." Mr. Obama has said the debt ceiling must be raised by $2.4 trillion to last through 2012.
How much does each plan cut?
Both the GOP plan and the Democratic plan call for $1.2 trillion in immediate cuts, but they don't specify where those cuts would come from -- they simply say the cuts would come from discretionary spending. The Democratic plan specifies that those cuts include both defense and non-defense spending.
House Republican plan: $1.2 trillion in savings over a decade -- in both cuts and caps on discretionary spending. The spending caps would trigger automatic, across-the-board spending cuts if not met.
Senate Democratic plan: $2.7 trillion in savings over a decade.
In addition to the $1.2 trillion in unspecified discretionary spending cuts, Reid's plan counts $1 trillion in savings from winding down the wars in Iraq and Afghanistan. This is seen as something of an accounting gimmick, although House Republicans included the savings in the budget they passed earlier this year.
That leaves $500 billion in savings to account for. As much as $400 billion comes from interest savings. Democrats point out that interest savings were included in the House-passed GOP budget as well.
The final $100 billion comes from "mandatory" savings. Democrats have loosely outlined where that money would come from, but the specifics are still unclear. For instance, that figure includes $30 billion in savings from "Fannie Mae/Freddie Mac reforms," and $40 billion in savings from "integrity savings"-- in other words, reducing fraud and abuse in mandatory programs. That figure also includes $15 billion in spectrum sales and $10 to $15 billion in agricultural subsidies.
Plans for deficit commissions
Both plans call for the creation of a bipartisan, 12-member deficit reduction committee. Both plans say that the committee's deficit reduction proposal should get an up-or-down vote, without any amendments, by the end of 2011.
House Republican plan: Boehner's plan for a deficit commission is more specific. It calls for the commission to identify $1.6 to $1.8 trillion in deficit reduction over a decade. Additionally, Republicans insist the committee will not recommend tax increases.
Under Boehner's plan, the commission would have until November 23 to report its recommendations to Congress. Both chambers would have to vote on it by December 23. As noted above, its passage is a condition of raising the debt ceiling again.
Medicare, Medicaid, Social Security?
Neither plan has a specific proposal for modifying Medicare, Medicaid or Social Security.
The difference: Democrats are boasting their plan does not affect the entitlement programs, while the GOP plan suggests the deficit commission will recommend modifications to the programs.
House Republican plan: Unlike the GOP's earlier plan, "cut, cap and balance," Boehner's plan does not make raising the debt ceiling contingent upon passing a balanced budget amendment. It does, however, require that both the Senate and the House at least vote on a balanced budget amendment by the end of the year.
Why they oppose each other's plans
Boehner: The speaker said today that the Democratic plan is "full of gimmicks."
Under Reid's plan, Boehner said, "We're not making any real changes in the spending structure of our government." He added the plan "doesn't deal with the biggest drivers of our deficit and debt" -- entitlement programs.
Reid: Democrats plan say Boehner's plan is unacceptable since Congress would have to fight over raising the debt ceiling again in six months.
Reid said today, "Speaker Boehner's plan, no matter how he tries to dress it up, is simply a short-term plan, and is, therefore, a non-starter in the Senate and with the president."