Saturday, 30 July 2011

News Report: US Senate Democrats' Latest Debt-Ceiling Offer

Credit: Reuters
Senate Democratic leader Harry Reid revised his plan to raise the U.S. debt ceiling on Friday with the hopes of winning over Republicans, but prospects for the measure are unclear.
Senate Republican  leader Mitch McConnell offered to bring the measure up for a quick vote on Friday night, but Reid declined -- a sign he probably does not have enough support to win the 60 votes needed to advance in the 100-seat Democratic-led chamber.
That procedural vote is expected to take place at 1 a.m. on Sunday (0500 GMT).
Here is a summary of Reid's latest offer:
Debt-Ceiling Increase:
* Democrats had  hoped to raise the debt ceiling by $2.4 trillion, enough to cover the country's borrowing needs through the November 2012 elections. The new plan would accomplish that in three stages, rather than all at once.
* President Barack Obama would be authorized to raise the debt ceiling by $1.2 trillion -- $416 billion at once to cover borrowing through September, and $784 billion after that.
* Congress could vote against the second debt-limit increase, and Obama would veto that vote, sending it back to Congress. At that point, the increase would take effect unless Congress mustered a two-thirds vote to override the veto. Presumably, Democrats would prevent that from happening.
* Obama could enact a second $1.2 trillion debt-limit increase once the Treasury department got within $150 billion of the current limit. The same process would ensue.
Spending Cuts:
* The bill also includes $2.2 trillion in spending cuts.
* Would not raise taxes or change major benefit programs like Social Security and Medicare.
* Would set up a joint committee to find additional savings in areas like health benefits and the tax code. The committee's findings would get an up-or-down vote in Congress by the end of the year.
* Would cut $752 billion from discretionary programs over 10 years.
* Envisions a discretionary level of $1.045 trillion for the coming fiscal year, $4 billion less than current levels.
* Caps military and security spending for the coming two fiscal years. Republicans have generally resisted cuts to military spending.
* Would count an anticipated $1.044 trillion reduction in war spending as savings. Many Republicans have derided that as "smoke and mirrors" accounting because war spending in Iraq and Afghanistan is expected to decrease anyway.
* Would count $376 billion in savings from reduced interest payments
* Would save $11 billion from reduced crop subsidies.

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