With less than 11 days until the August 2nd deadline, Congress is considering no less than five plans to raise the debt limit and lower the deficit.
House Minority Leader Nancy Pelosi (D-CA) offered the latest plan Friday afternoon, comprising $1.5 trillion in spending cuts, but not including new taxes or entitlement reform.
According to TalkingPointsMemo, Pelosi outlined her plan to a small gathering of bloggers and reporters, saying Democrats are “willing to bite the bullet and make serious cuts in discretionary spending.”
“[T]hat’s a non-revenue path. I don’t like it at all but it doesn’t go near our entitlements,” Pelosi reportedly said.
The emergence of yet another plan is the latest sign negotiations are dangerously fracturing.
Congress must not only increase the debt limit by August 2 to ensure the government can meet its obligations, but it must also address the growing federal deficit to meet the demands of the credit rating agencies. Standard and Poors has set its sights on a deal approaching $4 trillion in cuts, a bar the Pelosi proposal would not reach, assuming it could earn Congressional support.
Here are all the plans currently on the table:
- Obama-Boehner: A decedent of the “Grand Bargain,” this plan would include $3 trillion in deficit cuts including cuts to entitlement spending, but no new taxes. Congress would pledge to tackle tax reform next year. Both the White House and Speaker of the House John Boehner (R-OH) insist such a deal is not close, despite multiple media reports to the contrary.
- “Gang of Six”: The $3.7 trillion proposal floated by a bipartisan group of Senators earlier this week took many in Congress by surprise. The group’s plan would reform the tax code and cut entitlement spending later this year, after implementing $500 billion in cuts immediately.
- Reid-McConnell: Called the “last-ditch” plan, it was introduced by Senate Minority Leader Mitch McConnell (R-KY) last week, and would include minimal, if any spending cuts, while raising the debt limit. Senate Majority Leader Harry Reid (D-NV) put the brakes on the plan on Friday, saying the House must act on a compromise plan first.
- “Cut, Cap, and Balance”: The GOP House of Representatives’ plan is now dead in the Senate after it was tabled early Friday. The plan would enact trillions in spending cuts, while calling for a balanced budget amendment to the Constitution to pass Congress before the debt ceiling can be raised. Publicly, Boehner says it is the House GOP’s only debt ceiling plan. President Barack Obama threatened a veto if it comes to his desk.
- The Pelosi plan: $1.5 trillion in cuts to discretionary spending, without revenue increases. If savings from the wars in Iraq and Afghanistan were added in, it would result in $2.5 trillion in cuts.
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