Boehner v Reid Proposals: A Compare And Contrast Cheat Sheet

If anyone actually cares, the Committee for a Responsible Federal Budget has released the following handy summary cheat sheet which compares and contrast the key aspects of the Boehner and Reid proposals. We suggest nobody spend more than 2 seconds skimming through these as both will be vastly reworked by the end of trading today.

From the CRFB blog:

Comparing the Reid and Boehner Proposals

If you take a look at House Speaker John Boehner's proposal and Senate Majority Leader Harry Reid's proposal -- both of which increase the debt limit and enact deficit reduction in a two-part process -- you'll see that they are more similar than they are different (see below for a comparison table of elements within the proposals). Boehner has been promoting his proposal as one that would reduce deficits by $3 trillion, with $1.2 trillion in discretionary cuts upfront and $1.8 trillion to come out of a special process this fall. Reid's proposal would enact roughly the same $1.2 trillion in discretionary cuts upfront (more on that here), $70 billion in other mandatory savings, limit war spending to a total of $450 billion over 2013-2021, and put in place a similar special process to recommend additional savings by year's end.

You can see the similarities. A two-step process isn't perfect (read our release from last night on ways to make the process and enforcement as credible as possible), but it could help us raise the debt ceiling and start to set us on the right course.

Assuming that a two-part process seems to be where the consensus is, let's focus on the second part -- the joint committee, which would achieve real deficit reduction. As CRFB president Maya MacGuineas said yesterday:

"Promises of future savings are only as good as the intentions behind them, but if policymakers are serious in their understanding of the need to tackle entitlement reform and tax reform, these frameworks could do the trick.”

Subtle Differences

The proposals differ in how the promise of future savings from the joint committee would be enforced. The Boehner proposal would make the President's ability to request (subject to Congressional disapproval) a further increase in the debt limit contingent on enactment of committee recommendations under an expedited process. The Reid proposal would also require a vote on the committee recommendations under an expedited process, but does not provide enforcement to ensure that the savings are achieved. A strong enforcement mechanism to ensure savings materialize should be considered a necessity. Enforcement levers from the Gang of Six could be used to strenghten either framework. In addition, the Peterson-Pew Commission's paper on how to construct targets and triggers provides several ideas for strengthening enforcement rules, as well as PPC's fiscal toolbox which outlines some of the enforcement mechanisms present in other plans.

There is also a difference in the goals for the Committee.

Rather than offering a savings target, the Reid proposal sets a goal of reducing the deficit to 3 percent of GDP -- but does not specify when that goal should be achieved. It could be a year-in goal -- perhaps 2015, as with the President's Fiscal Commission. It could be a 10-year average deficit. No one knows.

The Boehner proposal instead calls for $1.8 trillion in deficit reduction -- but does not define what baseline that would be scored off of. It's difficult to evaluate the savings if the baseline is not specified. By remaining silent on the baseline but requiring the plans be scored by CBO under existing procedures, the Boehner proposal appears to require the Committee recommendations be scored against CBO's current law baseline, which assumes expiration of all the 2001/2003/2010 tax cuts as well as no AMT patch or “doc fix.”

****

In order to get beyond the baseline confusion and potential for gimmicks to artificially inflate savings, CRFB has recommended using specific debt-to-GDP levels and corresponding savings targets to ensure that legislation actually achieves the goal of stabilizing and reducing our debt.

As they currently stand, there is a lot of uncertainty with both the Reid and Boehner proposals. Perhaps that is by design, with the intent being to reconcile the two plans and find a consensus. Let's hope -- the debt limit must be raised as soon as possible, and it is time policymakers find common ground in order to make a deal. While these proposals have their differences, as can be seen below, there is much overlap.

Reid Proposal	Boehner Proposal
Debt Ceiling Increases
Raises debt ceiling by $2.7 trillion immediately, which would last until 2013	Allows President to request $900 billion increase in debt ceiling, $400 billion immediately and rest subject to vote of disapproval If more than $1.6 trillion additional savings from special committee enacted, President authorized to request $1.6 trillion debt ceiling increase, subject to vote of disapproval
Discretionary Spending
$1.2 trillion in savings over 10 years from discretionary caps Caps grow roughly with inflation Firewall between security and non-security spending for FY 2012 and FY 2013 Limits war spending to $450 billion over the 2013-2021 period Enforcement: 60-vote point-of-order on bill that would cause spending to exceed caps or to increase caps AND automatic, across-the-board cuts if caps are exceeded	$1.2 trillion in savings over 10 years from discretionary caps Caps grow roughly with inflation Details range for defense spending in FY 2012 and FY 2013 Enforcement: Automatic, across-the-board cuts if caps not met
Specified Other Mandatory Savings
$70 billion in other mandatory savings (savings other than from Social Security and federal health programs) $40 billion from program integrity to achieve savings from waste, fraud, abuse $15 billion from spectrum sales $10 - $15 billion from agricultural reforms Higher education reforms whose savings go to Pell Grants	$16 billion from program integrity to achieve savings from waste, fraud, abuse $13 billion from higher education reforms to go to Pell Grants
Special Committee to Identify Additional Savings
Joint, bipartisan committee of 12 lawmakers to "present options for future deficit reduction" Goal: Reduce deficit to below 3% GDP Mandate: Make recommendations to meaningfully improve short and long term fiscal imbalance, may include tax reform, shall consider bipartisan plans Recommendations guaranteed to receive up or down Senate vote under expedited process by the end of the year	Joint, bipartisan committee of 12 lawmakers to report deficit reduction legislation by November 23 Goal: $1.8 trillion in deficit reduction Mandate: Make recommendations to meaningfully improve short and long-term fiscal imbalance Enforcement: Second $1.6 trillion debt ceiling increase not authorized without enactment of at least $1.6 trillion additional savings Recommendations considered under expedited process
Balanced Budget Amendment (BBA)
None	Requires vote on BBA in House, and subsequent vote in Senate if BBA passes House

Comments

[JustanEmotion]

What a joke.

[RobotTrader]

Gold selling off, GS bouncing hard off the lows, looks like a deal is going to be announced soon.

[Backspin]

Any deal they come up with will not solve the problem at a fundamental level.  Gold may sell off short term, but long term it is still the place to be, with little doubt.

[caconhma]

Both political Parties are no-good liars.

It is obvious that nobody wants to cut anything at all. The only thing Democrats and Obama want is to have a blanket check for the reelection in 2012.

Consequently, regardless of an outcome of this pretend-show, the USA will go bankrupt because the entire country (politicians and citizens) is addicted to free-money. We have a runaway spending. This situation cannot continue for long anymore regardless of what China does or doesn’t do.

[redpill]

$1616 is a sell off?  Get back in your trunk.

[Missiondweller]

Now $1610

Huge move off today's high

[redpill]

$15 is no longer a huge move for gold.

[knowless]

it tracked with the nasdaq nearly word for word on the hourly. so whatever.

[SheepDog-One]

Robo so desperate to announce 'Gold selling off' so he can ignore the fact he's been bashing gold since $1,000 and hypong momo losers such as NFLX.

[Stoploss]

OOOOOOOOOOOOOOooooooooooo a whole dollar. Look at FX robotard. My six year old knows more about what's happening than you do.

 He says you  need a consultation, and his fee is five ounces, He can't decide if silver or gold, will let you know when i hear from him.

He's digging for info on something.

[Stoploss]

Robotard, this just in, he say's now the fee is 10 oz. Five gold, and five silver, no info until the chem tests have been done, sorry, he is a tough little somebitch.

[chdwlch1]

Don't forget...gold/silver futures expiration today as well.  Need to knock down gold to prove inflation is "transitory".  It's not just DC that follows the "never waste a crisis" mind set...

[Segestan]

It's to late in the ponzi gig to act financially responsible, the whole system was flawed from the beginning. Like a tiger chasing it's own tail.

[knowless]

butter bitchez.

http://www.youtube.com/watch?v=7oIYiq3u3wI

(commentary not withstanding)

I loved that book, i of course didn't know at the time that it made me racist.

[bob_dabolina]

Posted from another thread: 

Looks to me like the government did that for us all

Liability per taxpayer - $1,027, 052

Total debt per citizen (what every person owes) - $176,156 

This is with: 

Total peronal debt @ 51,440 per citizen and $45,105, 310 on food stamps. 

Good luck squeezing blood out of that rock.

If you had a 100% tax on every penny of every billionaire in this country do you know what you could pay off? Our fiscal year deficit (about 1.5 trillion) That's it, and you could never tax that again. That still leaves us with 15 trillion in debt (soon to be close to 18) and $200 trillion in unfunded liabilites.

It's a spending problem, not a revenue probem. We don't need higher taxes, we need to axe spending. Period

http://www.usdebtclock.org/

[flacon]

That's a good point. Do you have any links to articles which clearly show that taxation can not ever be enough to pay off the debt? 

[bob_dabolina]

How high do you want taxes to go? 

How about you do the math and find out how high we would have to raise taxes to pay off $18 trillion of debt, and fund $200 trillion in unfunded liablilites. 

Once you find the tax rate, let me know. We can talk then.

....or you can accept that we need to start spending within our means, and reign in spending we can't afford.

[flacon]

I'm not disagreeing with you - I was just looking for an article to send to my pHD brother who says that we should just raise taxes on the rich as well as cutting spending and then we will be able to live within our means. 

[bob_dabolina]

For your brother:

Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax (42 cents per gallon)
Hunting License Tax
Inheritance Tax Interest expense (tax on the money)
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
Road Usage Taxes (Truckers)
Sales Taxes
Recreational Vehicle Tax
Road Toll Booth Taxes
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and
local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer Registration Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax 

COMMENTS:
"Not one of these taxes existed 110 years ago and our nation was the most prosperous in the world, had absolutely no national debt, had the largest middle class in the world and only one parent had to work to support the family."

[flacon]

Thanks man. That's pretty good. 

[sgorem]

+111 Bob. Don't forget the Senates new Tax Bill # 0U812 that will tax the air WE breathe:)

[CrashisOptimistic]

The problem is what it has been for 3 years.

The Democrats had an overwhelming majority, but never passed a significant tax increase in either House.  Think about that.

In general, when the economy is teetering, a tax increase is instantly economic contraction.  It comes right out of the economy, reduces employment and presto, tax revenue declines.  The Democrats know this.  It's why they withdrew their request for tax increases.

You can fake spending cuts and defer them.  You raise taxes, they come out of the economy instantly, and result in lower overall tax revenue and worsen it all.

This is not really a political statement.  This is just pointing out that there is no solution to oil depletion causing all this and the near term end of our society.

And yes, I know that last paragraph grants you dispensation to ignore all that came before it.  I don't care.  

[Astute Investor]

The federal government takes in approximately $2.8 trillion annually.  Say you could take spending down to $0 from now and that continues well into the future.  I still don't see how $2.8 trillion of annual revenue could possibly service $215 trillion of liabilities (76x).  Looks like it's game over to me unless you renege on both the debt and entitlements.  Only morons who subscribe to the "we can grow out of it" theory would say otherwise.

[ZackAttack]

If you had a 100% tax on every penny of every billionaire in this country do you know what you could pay off? Our fiscal year deficit (about 1.5 trillion)

I wouldn't do it for the revenue; I just hate billionaires.

[P Rankmug]

My brain hurts!

http://www.youtube.com/watch?v=rTens4i32b0

[williambanzai7]

[sgorem]

William, is the guy on the LEFT with the Rolex, hairy reeed, or an impersonator? Thanks in advance. (ps. all of these political motherfuckers look and smell alike anymore.)

[Killuminati]

Zerohedge, don't you know this is all games and tricks, they will wait until the last minute to pass.  With provisions to create a new legislative body "super congress"  

[Seasmoke]

how can the word IF be in any proposal !!!!!!!!!!!

[NotApplicable]

So, this is like a "who's got the biggest invisible dick" contest?

[NOTaREALmerican]

It's politics, with lots of males involved.  What ELSE would it be!

[espirit]

Heard Boners pulling out, Green Chutes Reid.

[clagr]

What about the gazillion in savings from not declaring war on Mars?

[Rodent Freikorps]

We spent the peace dividend building windmills on the moon.

[sgorem]

We'll need those trillions to defend our dumb asses when the Martians ATTACK DAMNMIT, get with the program:)

[pupton]

Will either of these keep the rating angencies at bay???  At least the possibility of a balanced budget amendment could stall any downgrade temporarily, until it doesn't get the required votes in the senate.  Bottom line is both of these plans end up with <AAA debt rating.

[karzai_luver]

and then AA wil be the new AAA.

You are familiar with mark to fantasy,right?

If the "system" won't hold then the "rules" will be revised.

You are not one of them and never will be. Get over it, pup.

[sgorem]

my question has always been, "WHO RATES THE RATING AGENCIES?" and the fraudulent farce continues, until it doesn't.

[vocational tainee]

Oh, this is all politics to me..

[Bard]

Gold is getting slaughtered now which means they already compromised.

[sdmjake]

Slaughtered = Down 0.43% ??

Your choice of adjectives doesn't reflect reality.

[Dr. Richard Head]

I voted you up for your comment.....and your ass.

[Dr. Richard Head]

I voted you up for your comment.....and your ass.

[SheepDog-One]

Each bullet point just pure fantasy.

[V in PA]

"Caps grow roughly with inflation"
-------------------------------
Roughly!?! WTF

[nonclaim]

Bernanke is eerily quiet these days... I wonder if he is ready to announce his "plan" also.

[sgorem]

to my dismay, the fuck hasn't BLOWN HIS BRAINS OUT YET........fingers crossed though.

[nedwardkelly]

"Goal: Reduce deficit to below 3% GDP"

Goal: To drown in debt, just a little slower than otherwise

[Missiondweller]

But tolerable if you have 3% GDP growth (long term)

We've had a deficit of 11% GDP with nearly zero GDP growth. That's a disaster.

[Rodent Freikorps]

Anyone notice how badly Saab is sucking wind?

AMSTERDAM (Reuters) - Struggling Swedish car maker Saab said on Tuesday it cannot pay almost half of its workforce this month because it has not received the funds it had expected, reviving fears about its precarious finances.

Saab has lurched from one cash crisis to another in recent months, seeking funds so that it can restart production.

Car assembly was halted in April when suppliers refused to deliver parts until they were paid, and Saab only narrowly fended off a demand for one of its units to be declared bankrupt last week.

[CrashisOptimistic]

When you see double digit billions listed as savings from elimination of Fraud Waste and Abuse, you know that is euphemism for :

I Don't Want To Empty Cubicles

If cubicles do not empty, then you did not cut.  Simple as that.  It's not a complex formula.

[Peter K]

Looks like the further we get from a debt ceiling hike, the better the performance of the USD. Less debt=smaller supply= increase in prices. Sound familiar?

[kaiten]

Will there be a Reid - Boehner mudfight?

[Strider52]

That would be a Harry Boner mudfight.

 There, fixed it for ya.

[Mises knows best]

Big governement statists on both sides.

Ron Paul vs. the statists.

[Lord Maximus]

Rush Limbaugh was given the baseline budget numbers from a House Rep. this AM.

Our baseline budget (current services projections), per Congress, is $9.5 Trillion

If we only FROZE SPENDING for 2012...it would be scored by the CBO as $9.5 Trillion in "cuts"

Amazing!! If we don't spend another dime, the CBO will say that is a "cut"

It's a WORD WAR and we can't win this b/c the American people don't know this

[CrashisOptimistic]

It's a cut because of inflation.  3% of 3 trillion is 90 billion.  Freezing FY2012 spending chops 90 billion off, across the board.

That's 3% out of social security recipients pockets.  3% out of their pockets for medicare supplements.

3% out of weapons procurement and 3% cut in salaries for military and civil service (and that would trigger law suits, which cost money to defend).

This may be a legit approach, but don't pretend it's painless.  It would trigger an avalanche of lawsuits that would bury the courts, who themselves would be cutting salaries of judges and staff.  If you lose just one of those suits, you lose your 3% cut.

[Sudden Debt]

Just go back in History!

Look to a time when spending was as high as current income and copy that spending to compaire it to where the current cuts have to come from.

Use this spending and you have everything where Americans are used to in the past so cuts won't come hard.

AND DON'T TOUCH EDUCATION!

[mynhair]

TEA party in CONgress suggest Boner be replaced.

[ThirdCoastSurfer]

Waste, fraud and abuse -the 3 horseman of the apocryphal.

How would any speech, any proposal any action ever pass if we did not have these three ghosts to pin all our problems on and solve all our problems? 

[JacksLackofSurprise]

Since the Masters won't let the Great Ponzi die, make it easy...Reid's bill with Balanced Budget Amendment, good night all and allow gold to have its temporary dip on its path to 5k/oz.

The most laughable point on all the plans is calling 1 Trillion over 10 years an "accomplishment" yet we have wasted 5.1 Trillion in stimulus, TARP, QE and Bailouts over the last 3 years.

[docj]

I'd be interested to know how CRFB can score a "plan" that has not even been seen by members of the distinguished Senate Majority Leader's own freaking caucus.

http://thehill.com/blogs/blog-briefing-room/news/173819-dem-lawmaker-nob...

[sgorem]

wow, i was worried there for a moment. the us government (YOU AND ME), ARE ONLY PAYING ONE BILLION DOLLARS IN INTEREST PAYMENTS, PER HOUR. 

[karmete]

Well done! Thank you very much for professional templates and community edition sesli siteler sesli sohbet

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