House Republicans and Senate Democrats are pressing competing plans to pair an increase in the nation's $14.3 trillion borrowing limit with spending cuts and to create a special committee to recommend bigger savings for a vote later this year.
In a change announced on Friday, House Republicans would make the bulk of the debt limit increase contingent on Congress adopting an amendment to the Constitution requiring a balanced budget and sending it to the states for ratification.
The chief difference is the size of the immediate increase in the debt limit. Senate Democratic leader Harry Reid's $2.4 trillion debt increase plan would keep the government afloat into 2013, while Republican House Speaker John Boehner's $900 billion increase would require action next year.
Highlights of the competing plans:
House GOP: Immediate $900 billion increase in the debt limit; $1.6 trillion more would be made available after enactment of up to $1.8 trillion in future spending cuts and by adoption by both House and Senate of an amendment to the Constitution requiring a balanced federal budget. That would require a two-thirds margin in both chambers.
Senate Democrats: Immediate $2.4 trillion debt limit increase.
House GOP: Cuts $756 billion over 10 years from the day-to-day operating budgets of Cabinet agencies. Caps new spending at $1.043 trillion in 2012, $7 billion below 2011 levels. Total cuts of $917 billion, including interest savings.
Senate Democrats: Nearly identical caps on agency budgets. Saves $1 trillion more by assuming steep cuts in war funding. Total cuts of $2.2 trillion, including interest savings.
House GOP: Creates a 12-person, House-Senate bipartisan committee evenly divided between the political parties; charged with producing up to $1.8 trillion more in deficit cuts over 10 years. If a majority of the committee agrees on a plan, it would receive a vote in both the House and the Senate.
Senate Democrats: Nearly identical provisions. The panel would be instructed to seek deficit cuts sufficient to bring annual deficits deficit down to about 3 percent of the size of the economy, a level considered sustainable. That would still leave deficits of about $550 billion in 2015 and about $700 billion in 2021, compared to a $1.3 trillion deficit last year.
House GOP: Before any additional increase in the debt limit could take place, Congress must approve a balanced-budget amendment to the Constitution and send it to the states for ratification; establishes "program integrity" initiatives aimed at stemming abuses in benefits programs like Social Security; increases funding for Pell Grants for low-income college students by $17 billion over 2012-2013, financed by curbs in student loan subsidies.
Senate Democrats: Similar Pell Grant provisions and more extensive program integrity initiatives; reduces direct payments to farmers by about $1 billion a year; increases government revenues by $13 billion in revenues through auctions of airwaves spectrum to cell phone service providers.