Breakdown of competing debt limit plans
Republicans and Democrats unveil strikingly similar proposals. The difference is in the timing.
But in reality, the two sides aren't that far apart. Just take a look at the two proposals, which have more in common than you'd think.
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Both allow the debt limit to rise by nearly the same amount. Neither asks for new tax hikes. Both propose massive spending cuts. Both form new 12-member bipartisan committees to find more ways to save money.
The major disagreement here is on just one thing: having a second vote next year to raise the debt limit again. And both sides are sticking to their guns, because they're looking ahead to the 2012 election.
President Barack Obama wants this whole issue put to bed long before the election, and he favors a plan that carries the government through next year. He's the one who suffers the most in this drama, and he wants to steer the national conversation in other directions by then.
But Republicans would love it if the debt ceiling was a painful thorn in Obama's side throughout the 2012 campaign. They want to bring back the issue with a smaller debt-limit increase now and then another one next year after another vote.
It comes down to a showdown over 2012. That's the real issue to watch this week. Everything else can be patched up easily.
Here are more details about the plans pitched by both parties:
Debt ceiling: Lifted by $2.4 trillion
Spending cuts: $1.2 trillion over 10 years
Mandatory savings: $100 billion, including $15 billion in cuts to farm subsidies and $40 billion from other government programs. Counts $1 trillion in savings from winding down military operations in Iraq and Afghanistan, and interest savings of $400 billion.
Debt ceiling: Lifted by $2.5 trillion ($900 billion of that is immediate). The plan calls for raising the debt by $1.6 trillion more next year if a bipartisan committee can find $1.8 trillion in additional cuts.
Spending cuts: $1.2 trillion over 10 years. Requires a balanced-budget amendment vote in Congress this year.
There's another key difference in the plans. The Republican proposal would probably require significant cuts to Medicare and other federal entitlement programs, The Los Angeles Times reports. The Democratic plan avoids those cuts because it counts the savings from winding down military operations (which Republicans say is a gimmick because that would have happened anyway).
We're going to hear a lot about both of these plans in the next few days, since they're likely headed to the House and Senate for debate. Already some conservatives are rejecting the plan crafted by Republican House Speaker John Boehner, leading to questions about its survivability within its own party.
In the Senate, Majority Leader Harry Reid needs to find the support of seven Republicans to put any filibusters to rest.
How about plan C? Let's repeal the Bush tax cuts ($3.7 trillion) and reduce spending but $2.7 trillion over the next ten years. That's a total savings of $6.4 trillion which will eventually reduce interest by $300 billion per year saving another $3 trillion. We cam fix Social Security by raising the retirement age 1 month a year from the next 36 years. Fix Medicare by eliminating Medicaid.
Social security is not an entitlement, we all pay into this ponzi scheme on the promise that it will be there when we get old. If they are going to keep threatening to reduce it, and keep extending the retirement age then I want my money back and I hope millions will join me to get theirs too.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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