Deficit Deal Update: A Little Tweak Here and a Little Tweak There

Posted on July 28, 2011. Filed under: Uncategorized | Tags: , , , , , , , , , , , |

Reid said today that it would be easy to alter Boehner’s proposal, if it passes the House, by amending it to insert the new Reid bill language using the “amendment in the nature of a substitute” procedure. It would be difficult for Senate Republicans to object to consideration of the Boehner bill.

If the Boehner bill fails in the House, Reid will use a different House-passed bill as the legislative vehicle for moving his Senate Democratic debt limit bill. Republicans would be more likely to object to consideration of the underlying House bill, however, and could force a cloture vote just to get it to the Senate floor. For this reason, House passage of the Boehner bill may help Reid get his own bill through the Senate.

Boehner doesn’t yet have 217 Republican votes to pass his 2-Step debt limit bill in the House.
But, the Boehner bill is gaining ground among House fiscal conservatives this afternoon. Several Dems are considering voting for this bill also, although none have committed to doing so.

Meanwhile, according to Senate Democratic Whip Dick Durbin (D-(IL), Reid is continuing to talk to McConnell and Boehner in hopes of negotiating a bipartisan, bicameral compromise that can pass both chambers this weekend.

There are rumors today of a bipartisan compromise that might be developed at the last minute if both the Boehner 2-step plan and the new Reid bill fail.

There is also a rumor of a 30-day fix to allow more time to work out a compromise bill that would reduce the deficit by at least $2.7 trillion over 10 years. At this point, I don’t know if these rumors relate to the same bill, or represent two different fall back options.

The Reid bill, which CBO also found to save less than claimed, is being tweaked to bring its spending cuts up to the amounts specified in the original new Reid proposal.

The reason why both the Boehner 2-Step bill and the new Reid proposal needed to be amended following CBO scoring is the fact that all negotiations so far, even as far back as the Biden Group, were based on the January budget baseline.

In contrast, CBO is obligated to score the fiscal impact of legislation based on implementation of all current law, including extension of the Bush-era tax cuts only through 2012 and the spending cuts included in the FY 2011 CR.

Therefore, CBO uses a different baseline which does not count some of the spending cuts claimed by both Reid and Boehner in their respective original bills.

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