The Real Difference Between the Boehner and Reid Plans

July 28, 2011

Yesterday, the Congressional Budget Office (CBO) released “scores” for how much spending would be cut under two current debt ceiling plans, one proposed by House Speaker John Boehner (R) and the other proposed by Senate Majority Leader Harry Reid (D). The CBO reported that the Reid plan would save $2.176 trillion over the next ten years while the Boehner plan would save $851 billion over ten years.

The real story of the difference between these two numbers is about the way that the CBO scores its reports. As Ezra Klein noted, “The difference between the two scores says less about the two plans than it does about the maneuvering that led to them, and the CBO itself.” For example, the CBO is generally required to assume that programs are set to expire “even if Congress’s regular policy has been to extend them.” The CBO also sometimes has to assume the opposite is true, as is the case with the wars in Afghanistan and Iraq.

The two plans are actually very similar after adjusting for these CBO score oddities: each plan is estimated to cut discretionary spending by about $700 billion over ten years. The main difference is from Reid’s inclusion of the withdrawal of troops from Afghanistan and Iraq (labeled “Overseas Contingency Operations,” or OCO), which saves his plan $1 trillion in expense and $200 billion in interest. Boehner has indicated that this is not a savings because it is money that will not be spent anyway, and this is why he did not include it in his proposal.

Close readers may notice that CBO’s score for both plans is hundreds of billions of dollars less than the sponsors initially indicated. This is depending on when the CBO’s “baseline” starts, as different spending cut proposals can save different amounts of money. Here, the CBO used a March baseline instead of the January baseline which had been used to create proposals.

The CBO released a blog on their analysis of the Budget Control Acts of 2101 that can be found here.

The real difference is not so much in the savings but in the structural changes. The Boehner plan requires additional votes on further savings and a further debt limit increase vote before the 2012 election, while the Reid plan does neither.


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