Factbox: Details of competing U.S. debt limit plans

Mon Jul 25, 2011 4:14pm EDT

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(Reuters) - House Speaker John Boehner, a Republican, and Senate Democratic Leader Harry Reid unveiled dueling plans on Monday as Congress struggled to find a way to raise the government's borrowing limit before an August 2 deadline.

Dueling votes are expected as soon as Wednesday.

Here are details of the two plans:

HOUSE REPUBLICANS:

* Boehner is advocating a two-stage strategy that would require Congress to raise the debt limit again early next year.

* Under that scenario, Congress would raise the debt limit by up to $1 trillion before August 2, paired with $1.2 trillion in cuts to annual discretionary spending over 10 years. Automatic cuts would kick in if lawmakers spend more than envisioned in coming years.

* A special committee made up of equal numbers of Republicans and Democrats from the House and Senate would be tasked with finding at least $1.8 trillion in further savings -- from the tax code, Medicare and other benefit programs, or anywhere else in the budget.

* The committee would have until November 23 to come up with its recommendations. Congress would have to hold an up-or-down vote by December 23. The plan would only require 51 votes in the 100-seat Senate, not the usual 60 votes.

* If Congress approves the additional savings, Obama would be allowed to ask for a further debt-limit increase of $1.6 trillion, enough to cover the nation's borrowing needs through the November 2012 elections. Congress could vote to disapprove the request, but Obama could veto that disapproval.

* The plan does not explicitly rule out tax hikes, but Republican leaders would not be likely to appoint members who vote for them, according to an aide.

* The House and Senate would be required to hold a separate up or down vote on a balanced-budget amendment to the Constitution. That could prove uncomfortable for moderate Senate Democrats who are up for re-election next year and have backed the idea in the past.

SENATE DEMOCRATS:

* Would pair $2.7 trillion in cuts with a debt-ceiling increase large enough to last through the November 2012 elections.

* Would not raise taxes or change major benefit programs like Social Security and Medicare.

* Would set up a joint committee to find additional savings, similar to Boehner's plan. The committee's findings would get an up-or-down vote in Congress by the end of the year.

* Would cut $1.2 trillion from discretionary programs over 10 years. Democrats had been pushing for a lower figure, around $900 billion.

* Would count an anticipated $1 trillion reduction in war spending as savings as well, reflecting an approach taken by the Obama administration and House Republicans in their budget plans.

* Would count $400 billion in savings from reduced interest payments

* $100 billion in cuts to benefit programs and other spending that normally lies beyond the reach of the annual budget cycle. These include:

- $40 billion from tougher tax enforcement and reducing fraud in healthcare and unemployment programs

- $30 billion from Fannie Mae and Freddie Mac

- $15 billion from selling underused portions of the electromagnetic spectrum and reforms to a fund that makes telephone service more widely available

- $10 billion to $15 billion from reduced crop subsidies

(Reporting by Richard Cowan and Andy Sullivan; Editing by Eric Walsh)

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Comments (2)
I hope the people of America are aware of how pointless these debt ceiling talks are. The banks of the world have flooded trillions of dollars into the system, but all this is not money that’s connected to something of worth like gold, instead it’s debt. Of course the debts have to be paid back, with interest. That isn’t a difficult task, it’s impossible. There isn’t enough money in the system to pay back all these debts and interest payments, which means the system has failed, and the currency is likely to collapse. So the politicians and leaders in America will have to completely change the system in order to save the currency. There not doing this, instead they are squabbling like children over how much more to borrow and how much more debt to make in the name of the people of America. The American people, and their children and grand children are being loaded with debt that they will never be able to pay back. So if the politicians are not doing anything, except making the problem worse, then what can the people do to free themselves from this economic enslavement? Well YOU can educate yourself on the true scale and nature of the issues facing you, you can lobby you local politicians to grow a spine and stand up for America and her people, but more than anything you can follow @OccupyWallSt on twitter and join your fellow Americans in making a stand against those corrupt and wealthy few who look to control you and destroy your economy and national sovereignty. Good luck America.

Jul 25, 2011 5:49pm EDT  --  Report as abuse
jamesahha wrote:
LOL @ vigilante teen…

This is why we shouldn’t be cutting funding to education. Lower education = more Republican voters.

Jul 28, 2011 8:50am EDT  --  Report as abuse
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