WASHINGTON, July 27— House Speaker John Boehner rolled out a two-stage plan this week that would allow the $14.3 trillion federal debt limit to rise immediately by about $900 billion in exchange for $1.2 trillion in spending cuts. A second increase in the debt ceiling next year is linked to the ability of a new bipartisan Congressional committee to produce even more spending reductions.
But a day after his plan was released, the the Congressional Budget Office (CBO) informed Boehner that his debt-ceiling plan would reduce the deficit by about “only” $850 billion over 10 years. Now it’s back to the drawing board for the GOP leader as he attempts to fine tune his original proposal.
However, the original concepts of the bill are expected to remain in tact. Most of Boehner’s savings in the “Budget Control Act of 2011,” are based on mandatory spending caps, what would be achieved through a sequestration (across-the-board) reduction process. The president would be authorized to exempt any military personnel accounts, provided that the savings are achieved through across-the- board reductions in the remainder of the Department of Defense (DOD) budget.
The process largely mirrors the Balanced Budget and Emergency Deficit Control
Act of 1985 (also known as “Gramm-Rudman-Hollings”) legislation.
For more details on Boehner’s bill: