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updated: 7/30/2011 8:37 AM

Details of rival plans on spending and debt

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  • Senate Majority Leader Harry Reid, D-Nev., holds his hand up as he whispers to House Speaker John Boehner, R-Ohio, during a photo opportunity in the House Speaker's office before a meeting on the debt limit increase on Capitol Hill in Washington.

      Senate Majority Leader Harry Reid, D-Nev., holds his hand up as he whispers to House Speaker John Boehner, R-Ohio, during a photo opportunity in the House Speaker's office before a meeting on the debt limit increase on Capitol Hill in Washington.
    Associated Press

 
Associated Press

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.

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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:

Debt increase

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.

Spending caps

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.

Special committee

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.

Other

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.

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