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Reid: $2.7T in cuts, no tax revenues

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Slightly more mature than the current debate going on in Washington. (From icanhascheezburger.com)

Senate Majority Leader Harry Reid may have swerved in the game of chicken that is our debt ceiling debate, depending on how you look at it. He and Sen. Chuck Schumer, D-N.Y., held a press conference this afternoon to propose a $2.7 trillion deficit reduction package that would extend the debt ceiling into 2013.

The proposal would not include any additional tax revenues — which Republicans have taken a hard line on and has scotched all previous attempts at a bargain — but it would also not touch entitlements such as Medicare, Medicaid and Social Security. Reid said it would include $1.2 trillion in domestic discretionary cuts, including defense, over a decade and another $1 trillion from winding down the wars in Iraq and Afghanistan.

President Obama immediately endorsed Reid’s plan. But since Iraq and Afghanistan were going to end sooner or later, some view counting those savings as deficit reduction as a sham budget gimmick that won’t mollify creditors. Some conservative commentators and Republican staffers are already throwing cold water on the plan for just that reason.

Meanwhile, House Speaker John Boehner outlined his own plan, which would raise the debt ceiling in two stages. First, Boehner said, the government would cut $1.2 trillion over a decade and raise the ceiling by $1 trillion. Then, Congress would form a committee to prepare a bill cutting another $1.8 trillion. If Congress passes those cuts, the debt ceiling goes up another $1.6 trillion. (It also requires a vote on the Balanced Budget Amendment later this year.)

Boehner’s plan centers on exactly the kind of short-term debt ceiling increases that Obama and Democrats oppose, since it would force us to have this debate all over again during a presidential election. (And its worth noting that Republican leaders at one point also were against short-term increases.)

All of this means we’re probably no closer to a solution than we were this morning.

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  1. marielathan Says:
    July 26th, 2011 at 6:49 am

    I voted for him thinking Obama would bring the country together but I just can not trust his words now. He is hard left and deceiving people to move his agenda forward is what he does. http://bit.ly/nmuI7Y

  2. Patrick Says:
    July 27th, 2011 at 4:13 am

    Republicans don’t want to pay for these two wars THAT THEY STARTED and ran up the tab. Might be better if Boehner and his gang deploy to Afganistan. Bring the troops home. Oh wait, Most of boehner gang dodged the draft during Vietnam. Don’t need cowards on the frontline wioth our troops whom know “Shared Sacrifice”