House Republican leaders released a revised debt-reduction bill Wednesday evening after being forced to rewrite the bill so it complies with a promise from Speaker John Boehner (R-OH) to produce more spending cuts than new borrowing authority.
The new Boehner bill will cut the deficit $917 billion over ten years and raises the debt limit $900 billion, a net cost savings of $17 billion, according to a Congressional Budget Office analysis. In the next year along, fiscal year 2012, the bill would cut $22 billion in spending.
Boehner and company were forced back to the drawing board Tuesday after the CBO estimated his bill cut only $850 billion over 10 years, not the $1.2 trillion he had projected.
The misstep during a pivotal week for Boehner gave critics on the right more cause for concern as opposition within GOP fiscal conservative circles mounted late Tuesday. The Boehner bill would enact a $900 billion initial increase in the $14.3 trillion debt ceiling with a second increase and additional deficit-reduction savings coming months later, in a second step.
With Congress facing down an Aug. 2 deadline to act or send the nation into default for the first time in its history, House GOP leaders plan to bring the revised bill to the House floor Thursday.
Meanwhile, Senate Democratic leaders called Boehner (R-Ohio) to abandon his two-step bill, saying it would not receive a single vote in the upper chamber.
Democrats pointed to a CBO score released Wednesday for the plan by Senate Majority Leader Harry Reid (D-Nev.), which affirmed it would cut the deficit by $2.2 trillion.
Reid also said he could easily adjust his bill to increase its projected savings to $2.4 trillion or more, enough to cover an increase to the debt limit necessary to carry the nation beyond the 2012 election.
“For us to arrive at $2.4 [trillion], $2.5 [trillion] is really pretty easy to do — it’s what we call tweaking,” Reid said. “The bottom line is there’s only one bill in Congress that’s a true compromise. We’re running out of time and it’s time to get serious about finding that compromise.”
“The Speaker’s plan is on life support, and it’s time for him to pull the plug,” said Sen. Chuck Schumer (D-N.Y.), chairman of the Senate Democratic Policy Committee. “The Speaker is wasting precious time. Every day he spends twisting arms in his caucus, we careen closer to catastrophic default.
But Boehner’s spokesman Michael Steel threw cold water on the Democratic victory celebrations, saying that CBO had released a misleading estimate when it comes to Reid’s plan.
“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. “Despite previous claims, it significantly falls short of the requirement that we cut more than we increase in the debt limit.”
The Democratic plan relied on “smoke and mirrors,” Steel said, and would cut $500 billion less than Reid initially said he wanted.