CBO: Reid bill a bigger reduction in spending … barely

posted at 11:25 am on July 27, 2011 by Ed Morrissey

The Washington Times reports today that the duel of spending reduction bills may be won by Harry Reid.  The CBO scored Reid’s proposal better than John Boehner’s on actual reductions in spending, although neither takes a machete to the budget.  In fact, the difference is almost indistinguishable:

The Congressional Budget Office said the plan by Senate Majority Leader Harry Reid would raise the government’s borrowing limit by $2.7 trillion, and cut $2.2 trillion from future spending, chiefly by limiting the amount of money spent on the wars in Iraq and Afghanistan. …

The CBO analysis could give momentum to Mr. Reid’s plan, though the GOP says spending on the wars in Iraq and Afghanistan was going to drop anyway, and so shouldn’t be considered as future savings. …

The CBO said the Senate bill’s discretionary spending cuts would result in $840 billion in lower authorized spending, and $750 billion in actual lower outlays over the next decade. The Senate bill also capped spending on the two wars at $450 billion over the next decade, which would mean spending authority is $1.2 trillion lower, and actual outlays would be $1 trillion lower.

Reid’s advertising his proposal as authorizing $2.2 trillion in cuts for a $2.7 trillion debt-ceiling increase, but most of those cuts would happen anyway.  Reid counts dollars spent on the war at current rates as part of the savings when the drawdowns occur, savings that are already in place.  Instead, his bill cuts in 10 years roughly half of the annual budget deficit, averaging $75 billion a year, which is roughly nineteen days of borrowing at current deficit rates.

That’s an improvement over Boehner’s bill, but not by much.  Boehner would save $710 billion over the next decade, averaging $71 billion a year, which accounts for 17.3 days of borrowing at the current rate of deficit spending.  That’s more of a distinction without a difference.  Boehner’s bill would only authorize a $900 billion hike in the debt limit, however, which would force a new round of cuts before next year’s election.  Unlike Reid’s proposal, Boehner assumes that the savings in war funding have already taken place.

Boehner promised to go back and rewrite the House bill to get more savings out of it.  Given these figures, that shouldn’t be a terribly difficult task.  However, at this point, it looks like the two chambers are close enough in figures and approaches to pass their bills and get a conference committee to deal with the differences, which is probably what will happen by the end of the week.

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So, Reid’s smoke and mirror bill actually does slightly better than the Spelunker of the House bill? What a boehner…

Gohawgs on July 27, 2011 at 11:29 AM

CBO: This plan is also a crap sandwich but has Grey Poupon drizzled over it.

Bishop on July 27, 2011 at 11:29 AM

It’s all BS.

Neither bill actually has any spending cuts. Both bills set up committees and commissions to do studies on cuts. Which means in either case nothing is ever cut.

Boehner might as well come out with a plan that cuts $100T. It’s as likely to happen as cutting $1T, which is to say never going to happen.

angryed on July 27, 2011 at 11:29 AM

Now I am ticked off…there is no way Reid should be anywhere close to the cuts Republicans want to make, let alone more.
Boehner, better sharpen your pencil and try harder, the liberals should be squealing like pigs, not out performing Republicans in cuts.

right2bright on July 27, 2011 at 11:30 AM

“I think your 1/4% tax increase goes too far.”
“Well I think YOUR 1/4% tax increase doesn’t go too far enough!”

-Futurama.

DrAllecon on July 27, 2011 at 11:34 AM

I don’t get raising a debt limit which can be spent today, in exchange for “cuts” over 10 years.

Maybe I live in fly-over country, but that is considered nonsense out here.

Starlink on July 27, 2011 at 11:31 AM

It is insane isn’t it. We’re spending $1.5T per year more than we take in. And the solution being debate is whether to cut $70B or $80B a year in spending.

It’s like saying I make $100K a year, I spend $250K every year. I promise to cut my spending down to $240K a year if you in exchange lend me another $250K this year.

INSANITY.

angryed on July 27, 2011 at 11:34 AM

Now I am ticked off…there is no way Reid should be anywhere close to the cuts Republicans want to make, let alone more.

That’s for sure. This all appears to be a farce.

Drained Brain on July 27, 2011 at 11:34 AM

Boehner, better sharpen your pencil and try harder, the liberals should be squealing like pigs, not out performing Republicans in cuts.

right2bright on July 27, 2011 at 11:30 AM

Rumor, Boehner has made a deal with Reid. Get the pitch forks and torches ready. Also, warm up the tar and get the feathers ready.

From RanSquawk: Market talk that a US debt ceiling agreement may have been reached; unconfirmed

Oil Can on July 27, 2011 at 11:34 AM

Reid bill or Boehner bill -False choices.

“I am from the government, I have brought you these two choices: in one hand I hold a crap sandwich that you must eat, in the other hand I hold a fecal crepe that you must eat. Which do you choose?”

batterup on July 27, 2011 at 11:34 AM

However, at this point, it looks like the two chambers are close enough in figures and approaches to pass their bills and get a conference committee to deal with the differences, which is probably what will happen by the end of the week.

And the dems, rightly so, will be able to crow that they cut more than the Republicans…what a boondoggle, what an embarrassment, what a disgrace of leadership.
The dems, because of the ineptness of Boehner, now own the government cuts…it is no longer a campaign issue, one of our strongest issues, and we gave it up.
What fools…I was giving them the benefit of the doubt, but now, they are just punk political hacks not willing to go to battle, so they lose the war.
Pissis me off….

right2bright on July 27, 2011 at 11:34 AM

17 days of borrowing saved for all this angst. It guarantees a downgrade and financial collapse BEFORE the election.

michaelo on July 27, 2011 at 11:35 AM

How in the world did Boner get so squishy that he got out-cut by the Marxists? Man, talk about an embarrassment! And our guys are supposed to be the sane ones?

Ogabe on July 27, 2011 at 11:35 AM

Sign Reid’s bill and get on with the 2012 election.

faraway on July 27, 2011 at 11:37 AM

Ok, sorry guys…

RT @BergenCapital: U.S. SENATE DEMOCRATIC LEADERSHIP AIDE SAYS “THERE IS NO DEAL” YET ON DEBT LIMIT, IN RESPONDING TO MARKET RUMORS

Oil Can on July 27, 2011 at 11:37 AM

Just go back to the pre-TARP budget and start from there… I can live with less government…

Khun Joe on July 27, 2011 at 11:39 AM

Ogabe on July 27, 2011 at 11:35 AM

The worst part…it took one of our biggest political platforms out from under us.
There is hardly a more broad appeal across America now as to reduce the size of the government, and the Republicans owned that…now we gave up our most broad, our most valuable, our most appealing, our strongest plank, out of the platform and gave it to the dems.
An unbelievable mistake, that could cost us the next election…Republicans can no longer say “We are the party of smaller government”…think about that, a campaign issue that for almost 100 years, and Boehner just gave it up at one of our Nations most critical time.
This is not about budget, we may have just lost the election…and future elections.

right2bright on July 27, 2011 at 11:40 AM

Reids is a ONE part scam

Boehner’s is a TWO part, DON’T let them make you forget.

I still think they should have stuck to the one already PASSED and force a Senate vote 1st BEFORE all this drama.

golfmann on July 27, 2011 at 11:42 AM

How in the world did Boner get so squishy that he got out-cut by the Marxists? Man, talk about an embarrassment! And our guys are supposed to be the sane ones?

Ogabe on July 27, 2011 at 11:35 AM

Are the ‘cuts’ really so significant, though? If you eliminate the war-spending ‘savings’ gimmick from Reid’s bill, the actual cuts there are a lot less impressive.

Whatever. Onwards towards lowered debt ratings!

Vyce on July 27, 2011 at 11:43 AM

Everyone is getting an email and phone call from me today…as if I don’t have enough to do, now I have to make dozens of calls…this is horrible, absolutely the worst nightmare I could ever imagine.

right2bright on July 27, 2011 at 11:43 AM

According to this article we have already reached our debit limit back in May.
http://cnsnews.com/news/article/federal-tax-revenues-have-exceeded-inter

That being said there is IMHO No reason to raise the debit limit at all. The only thing that they should be taking care of now is cutting the wasteful spending and balancing the budget. If we have been able to “pay our bills” since May, clearly default won’t happen. The federal govt takes in revenue every day. The problem is what they are doing with it.

milwife88 on July 27, 2011 at 11:44 AM

In order to make cuts currently, wouldn’t you have to have a budget? I am obviously not a bookkeeper but juggling money month to month with no real clear of income and outlay is just bizarre. I think they are doing it wrong.

Cindy Munford on July 27, 2011 at 11:45 AM

What only matters is FY2012, the rest is empty promises. Pass a debt bill to get us to the end of October with a little margin and pass a FY2012 budget that has some real cuts.

bigtallgoo on July 27, 2011 at 11:46 AM

Do you get the feeling that the public act is just a show, while behind the scenes these fools are sitting in the sauna and conspiring about what they really want to do, which is to protect themselves and their jobs?

Bishop on July 27, 2011 at 11:51 AM

absolutely the worst nightmare I could ever imagine.

right2bright on July 27, 2011 at 11:43 AM

I would ask that you consider that Obama has created this atmosphere of chaos in everyone’s mind.

His goal is 2 fold:
- pin the fault of the bad economy on the GOP/Tea Party (he does this by passing Boehner’s plan in the end)
- split the GOP (based on reading this blog, mission accomplished)

We should pass Reid’s plan.

faraway on July 27, 2011 at 11:54 AM

So Boehner’s bill is close to Reid’s bill in cuts. In fact, its less! Why is Boehner the GOP leader again??

milemarker2020 on July 27, 2011 at 11:54 AM

Yes Boner really blew it here. This is going to cost Republicans their credibility on spending cuts. Just imagine – the country is going down a monstrous, unimaginable debt-hole, and Boner cuts a whole $1 freaking billion dollars!

Out of a budget of $3.5 Trillion, the RINO squish can only scrape together a tiny, and laughable $1 billion cut. That’s pocket-change, a rounding error on a tiny program. It’s nothing, and what’s worse – the RINOs have now lost their cost-cutting credibility to the frickin spendaholic Marxists!

Ogabe on July 27, 2011 at 11:56 AM

$2.2 trillion in cuts for a $2.7 trillion debt-ceiling increase

Reid’s fishing boat can hold 40 gallons of water before it sinks. He plans on taking 45 gallons of water with him on his fishing trip.

Perfectly balanced don’tcha think?

shick on July 27, 2011 at 11:57 AM

On Topic: Dingy Harry, Schlocky Schumer and Dirtbag Durbin are on camera now threatening and demagoguing, promising default, and demanding acquiescence to Democrat hegemony, using the power of media to wield the club.
.
As always, they suck.

ExpressoBold on July 27, 2011 at 11:59 AM

I don’t get raising a debt limit which can be spent today, in exchange for “cuts” over 10 years.

Starlink on July 27, 2011 at 11:31 AM

Exactly. It’s not “gettable.” Besides which, at anything approaching this spending rate, we don’t have 10 years.

Barnestormer on July 27, 2011 at 11:59 AM

Years ago, during a Thanksgiving Day game between Dallas and some other team, a Dallas defensive lineman (Leon Lett, I think) scooped up a fumble or intercepted a short pass and rambled towards the end zone for an apparent touchdown. But before he passed the goal line, he started prancing and, ultimately, had the ball knocked out of his hands by a player on the opposing team. Rather than a touchdown, the other team regained possession because of a touchback in the end zone.

Boehner is a legislative Leon Lett.

BuckeyeSam on July 27, 2011 at 12:01 PM

They haven’t produced a budget in over two years. They have overspent revenues by trillions. Almost all of them are millionaires and have never produced anything. And when they retire they have everything paid for for the rest of their lives.

Our congress believes it is too big to fail and we keep sending them back to manage our affairs. Primary every damn one of them.

DanMan on July 27, 2011 at 12:02 PM

Reid’s bill is worse because it takes us past the elections so we don’t get another bite of the apple, so to speak, to further reduce spending.

Vince on July 27, 2011 at 12:03 PM

I don’t get raising a debt limit which can be spent today, in exchange for “cuts” over 10 years.

Maybe I live in fly-over country, but that is considered nonsense out here.

Starlink on July 27, 2011 at 11:31 AM

Here, too. It’s the approach developed in the Whimpy School of Finance and Economics: I’ll gladly pay you Tuesday for a hamburger today.

BuckeyeSam on July 27, 2011 at 12:04 PM

Here’s what Leftist Icon Paulie Krugman had to say yesterday, for those who missed it-h/t to Newsbusters.

New York Times columnist Paul Krugman on Tuesday said it was a “moral issue” for the press to censor conservative views about the debt ceiling.

Quite shockingly, the Nobel laureate took to his blog to complain that the news media are being too fair and balanced in their coverage of this highly contentious issue:

http://newsbusters.org/blogs/noel-sheppard/2011/07/27/krugman-balanced-news-media-true-moral-failure-destroying-america#ixzz1TK55G6rO

Del Dolemonte on July 27, 2011 at 12:06 PM

Just go back to the pre-TARP budget and start from there… I can live with less government…

Khun Joe on July 27, 2011 at 11:39 AM

Good question: why can’t we just go back to the 2006 –2007 levels of spending?

Why can’t we go back to the spending before Bluffy the Prosperity Slayer was elected?

Chip on July 27, 2011 at 12:08 PM

Like I said for the past few weeks Boehner needs to be replaced but soon, definitely before this year is out.

AH_C on July 27, 2011 at 12:14 PM

Good question: why can’t we just go back to the 2006 –2007 levels of spending?

Chip on July 27, 2011 at 12:08 PM

I was wondering the same thing and looked at the CBO numbers. Mandatory spending is much larger than 2006-2007 levels and is almost equal to present revenues. Any attempt to balance the budget now has to take into account social security and medacare/medacaid.

bigtallgoo on July 27, 2011 at 12:23 PM

Why doesn’t Boehner just add in the “cuts” from the wars ending, too. Then his “cuts” will be more than Reid’s?

mhrepub on July 27, 2011 at 12:24 PM

What a pickle the GOP has found itself in, letting Harry Reid come out the winner. At least, that’s what it looks like right now. What a huge disappointment that would be.

scalleywag on July 27, 2011 at 12:28 PM

Wow! 70Billion a year, color me impressed. That should fix Washington’s spending problem and fix it good. My only concern is whether we get to keep the cowboy poetry festival?

kringeesmom on July 27, 2011 at 12:29 PM

Good question: why can’t we just go back to the 2006 –2007 levels of spending?

Chip on July 27, 2011 at 12:08 PM

O’Reilly even made that suggestion months before all this mess got started. Sounds like simple stuff to me!

scalleywag on July 27, 2011 at 12:30 PM

Hey gang: like you I don’t think that Boehner’s plan cuts as much as truly needed, but let’s not get the pitchforks just yet.

The narrative today will be that Reid’s plan cuts more than Boehner’s. Like somebody else posted in here, keep in mind that Boehner’s plan is intended to pass a stopgap now and continue the debate for a second, more extensive rounds of cuts later in the year and into next year.

Reid’s plan cuts more total simply because Boehner’s cuts a little less up front. But the latter then adds equal or more cuts in a few months while Reid’s plan does all its cutting together and does what Reid likes to do best: table the bill- forget about it.

With the Conservatives and Tea Partiers somewhat divided over Boehner’s plan, Democrats will try to make it look that the Reid plan is the better thing when in reality it is not.

Boehner’s plan may not cut all we want it to cut right off the bat, but at least it keeps the this discussion open and in Congress over the next 16 or so months. Forget about the election next year- I ‘d say that the more current this issue remains (unlike Reid who just wants to be over with it) the better the outcome. We are in a mess we can’t just solve in a few days.

So, make all the calls to all the people in Congress, but before taking out the torches and pitchforks maybe just let them know that we are thankful of the way they have forced this debate and by holding the line on cutting, and that we can get behind the Boehner plan if it has some more cutting in the first phase.

Keep in mind that the Boehner plan would keep the issue of a Balanced Budget Amendment in the Congress floor and the closer we get to an election the more chances Blue Dog Democrats will likely vote for one.

ptcamn on July 27, 2011 at 12:31 PM

Both suck, but doesn’t Reids bill use spending on wars as cuts? Yet those wars are still ongoing? If so, the CBO is basing this on politics, not truths…and not genuine cuts.

capejasmine on July 27, 2011 at 12:32 PM

O’Reilly even made that suggestion months before all this mess got started. Sounds like simple stuff to me!

scalleywag on July 27, 2011 at 12:30 PM

Stossel was on O’Reilly last night, and said he would show the audience how it can be done, on his Thursday night show.

capejasmine on July 27, 2011 at 12:33 PM

The point is to change policy, not to get Rs elected.

To avoid even making the Democrats have to choose to oppose cuts on the record or fold under perspiration and enact change accomplishes neither. It is a complete failure of leadership and another victory (in a long line) of cynical RINO Rove-ism.

HitNRun on July 27, 2011 at 12:41 PM

All God’s children have a Debt Celing plan. Except Obama.

kingsjester on July 27, 2011 at 12:48 PM

A little info you can pass on to those who are worried about their Social Security checks: the SS trust fund (the so-called lockbox) contains over $2 trillion in treasuries which are already being counted as part of the outstanding debt.

These could be sold for cash, without increasing the outstanding debt specified in the debt ceiling, if needed to cover any temporary shortfalls in incoming revenues needed to cover the outgoing checks.

So if any seniors are not getting their checks or are getting them late it is only because the administration wants it that way.

agmartin on July 27, 2011 at 12:50 PM

Bishop on July 27, 2011 at 11:51 AM

Yes.

Cindy Munford on July 27, 2011 at 1:23 PM

A Gazillion dollars in cuts promised is a fraud. Yet another phony commission empowered to raise taxes as well as cuts is a betrayal. The CBO’s estimates are based on data provided by Congress full of manufactured assumptions, in other words, complete bullshi’te.

So suddenly the Tea Party is supposed to trust ‘I just pulled a better plan out of my ass’ Reid who days ago was sneering at Teahadists?

DANEgerus on July 27, 2011 at 1:23 PM

Government needs to eat it’s peas. The only plan that comes close to making any kind of sense is C.C.B.

If these morons where interested in doing what was best for the Country they would pass it. These dimwits aren’t interested in doing what’s best for the American people, only in doing what’s in their own best interest.

E L Frederick (Sniper One) on July 27, 2011 at 1:55 PM

I was going to make this a Green Room post, but by the time I got my charts done, everybody was close to all over it.

There is, however a couple “minor” points of order:

- While the back-to-the-drawing-board Boehner plan would have cut less, it also only would have raised the debt ceiling by far less ($900 billion versus $2,700 billion).

- While both plans would have had a bipartisan commission to find more “cuts”, at least if either the CBO extended-baseline or the House budget are anything close to reality, what you see in hard numbers on Reid’s plan is what you’ll see in total eventual cuts, while Boehner promises a “hard” number on cuts to come.

- Boehner once again really back-loaded things, while Reid at least put some real, if small, cuts on the front end.

In short, Boehner should have waited until after the Obama/Soros-ordered default to bring this craptastic sandwich out.

Steve Eggleston on July 27, 2011 at 2:33 PM

I was GOING TO WRITE a check to the government, to pay off the national debt. I’ve changed my mine, SO I’VE SAVED MYSELF $14 trillion dollars.

GarandFan on July 27, 2011 at 3:29 PM

“I’m not going to commit to something that nobody I know has seen and had a chance to analyze,” Rep. Earl Blumenauer (D-Ore.) said. “I want to see it.”

No one has seen the details of Reid’s proposal…

right2bright on July 27, 2011 at 3:54 PM

Cut cap &balance passed the house and has a debt ceiling raise in it. If the senate and President think a debt ceiling raise is so vital then they will pass that. There is no reason to pass anything else in the house.

Resolute on July 27, 2011 at 4:56 PM