CBO: Boehner Debt Plan Saves $850 Billion Over Ten Years, Just $1 Billion In 2012

Boehner's Debt Ceiling Plan Falls Short, CBO Finds

WASHINGTON -- The debt ceiling deal introduced by Speaker John Boehner (R-Ohio) would save, by one measure, roughly $850 billion over the course of ten years and just $1 billion in 2012 -- two metrics unlikely to satisfy the most conservative members of his conference.

The Congressional Budget Office, which is the official scorekeeper of legislation, released its analysis of the Budget Control Act of 2011 on Tuesday afternoon. The findings were damaging enough that an hour later, Boehner's office told reporters it would rewrite the bill to achieve a more favorable scoring. Hours after that, GOP leadership announced it was delaying a vote on the plan until Thursday.

Measured against March 2011 government expenditure levels, the Boehner proposal, as currently written, would reduce the deficit by $850 billion during the next decade, according to the CBO. Measured against January 2011 government spending levels, the bill would reduce budget deficits by roughly $1.1 trillion during that same time period.

The findings are a setback of sorts for the speaker, who was hoping to present a package of steep cuts to a skeptical GOP. In the end, however, he is a victim of his own success. The reason that the CBO adjusted its baseline is, in part, because of the spending cuts that Boehner was able to secure during the government shut down debate during the spring.

Potentially more problematic for Boehner is the finding that his debt ceiling package will only reduce federal spending by $1 billion in 2012, and $16 billion in 2013. House Republicans have demanded that deep cuts be felt immediately as a condition for their support.

"Americans deserve immediate spending cuts that demonstrate that we are charting a swift path toward a balanced budget. We must implement discretionary and mandatory spending reductions that would cut the deficit in half next year," read a May 2011 letter from the conservative Republican Study Committee.

"[A]ny move to raise the debt limit must be accompanied by immediate spending cuts and binding reforms so that we don’t continue to push our country down the road to bankruptcy," House Majority Leader Eric Cantor (R-Va.) said in early May.

Boehner himself has repeatedly echoed those statements. Earlier this month, he specifically pushed back against a suggestion by Democrats that the majority of spending cuts could be concentrated in future years, rather than begin immediately.

Yet the Budget Control Act of 2011 appears to falls short of that bar.

“We’re here to change Washington – no more smoke-and-mirrors, no more ‘phantom cuts.’ We promised that we will cut spending more than we increase the debt limit – with no tax hikes – and we will keep that promise," Boehner spokesperson Michael Steel said in a statement after the CBO analysis was released. "As we speak, Congressional staff are looking at options to re-write the legislation to meet our pledge. This is what can happen when you have an actual plan and submit it for independent review – which the Democrats who run Washington have refused to do.”

While actual budgeting makes it nearly impossible to achieve immediate cuts in programs already up and running, another problem Boehner's legislation runs into is that it actually spends money in two areas. According to the CBO, $17 billion is spent on Pell Grants from 2012 to 2015 –- an unexpected addition to a deficit-reduction measure. The bill makes other changes to the Federal Student Loan Program to bring that expenditure closer to being deficit neutral. But between 2012 to 2016, the government will still be spending $7.4 billion more on this subsection of the budget.

Boehner's bill also devotes $1 billion to "program integrity activities," which are, more or less, enforcement mechanisms to snuff out abuse and waste in government programs. That expenditure will presumably save Congress in the long term. But for the purposes of budgeting, it counts as an expenditure in the short term.

The vast majority of savings in Boehner's bill, which would require the creation of a committee to find an additional $1.8 trillion in cuts in exchange for a future raising of the debt ceiling, comes from discretionary spending caps that will take tens of billions of dollars out of the budget on a yearly basis starting in 2013. But that might not be enough to satisfy the party's most conservative members who will note, rightly, that $1 billion in cuts in 2012 represents 0.03 percent of current spending.

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