July 31st, 2011
Econintersect: The Congressional Budget Office estimated that the Senate Majority Leader Harry Reid's apply named Budget Control Act of 2011 would reduce budget deficits between $2.1 and $2.4 trillion over 10 years. Econintersect has estimated that the budget shortfall over ten years is likely in the range of $13 trillion to $17 trillion.
- Establish caps on discretionary spending through 2021, including separate caps on new funding for war-related activities;
- Allow for certain amounts of additional spending for “program integrity” initiatives aimed at reducing the amount of improper benefit payments and enhancing compliance with tax laws;
- Make changes to the Pell Grant and student loan programs;
- Reduce certain payments to agricultural producers;
- Establish a procedure for increasing the debt limit by $416 billion initially and subsequent procedures that could allow the limit to be raised in two additional steps, for a cumulative increase of as much as $2.4 trillion;
- Reinstate and modify certain budget process rules; and
- Create a joint Congressional committee to propose further deficit reduction.
For more reading on the debt ceiling, please see Debt Ceiling Debate Only Kicks the Can Down the Road
Before you get any ideas that the plan falls short in comparison to the Republican plan, the CBO has compared Reid's plan to House Speaker Boehner's plan.
They both come up short, even more than does the Reid bill.