If you take a look at House Speaker John Boehner's proposal and Senate Majority Leader Harry Reid's proposal -- both of which increase the debt limit and enact deficit reduction in a two-part process -- you'll see that they are more similar than they are different (see below for a comparison table of elements within the proposals). Boehner has been promoting his proposal as one that would reduce deficits by $3 trillion, with $1.2 trillion in discretionary cuts upfront and $1.8 trillion to come out of a special process this fall. Reid's proposal would enact roughly the same $1.2 trillion in discretionary cuts upfront (more on that here), $70 billion in other mandatory savings, limit war spending to a total of $450 billion over 2013-2021, and put in place a similar special process to recommend additional savings by year's end.

You can see the similarities. A two-step process isn't perfect (read our release from last night on ways to make the process and enforcement as credible as possible), but it could help us raise the debt ceiling and start to set us on the right course.

Assuming that a two-part process seems to be where the consensus is, let's focus on the second part -- the joint committee, which would achieve real deficit reduction. As CRFB president Maya MacGuineas said yesterday:

"Promises of future savings are only as good as the intentions behind them, but if policymakers are serious in their understanding of the need to tackle entitlement reform and tax reform, these frameworks could do the trick.”

Subtle Differences

The proposals differ in how the promise of future savings from the joint committee would be enforced. The Boehner proposal would make the President's ability to request (subject to Congressional disapproval) a further increase in the debt limit contingent on enactment of committee recommendations under an expedited process. The Reid proposal would also require a vote on the committee recommendations under an expedited process, but does not provide enforcement to ensure that the savings are achieved. A strong enforcement mechanism to ensure savings materialize should be considered a necessity. Enforcement levers from the Gang of Six could be used to strenghten either framework. In addition, the Peterson-Pew Commission's paper on how to construct targets and triggers provides several ideas for strengthening enforcement rules, as well as PPC's fiscal toolbox which outlines some of the enforcement mechanisms present in other plans.

There is also a difference in the goals for the Committee.

Rather than offering a savings target, the Reid proposal sets a goal of reducing the deficit to 3 percent of GDP -- but does not specify when that goal should be achieved. It could be a year-in goal -- perhaps 2015, as with the President's Fiscal Commission. It could be a 10-year average deficit. No one knows.

The Boehner proposal instead calls for $1.8 trillion in deficit reduction -- but does not define what baseline that would be scored off of. It's difficult to evaluate the savings if the baseline is not specified. By remaining silent on the baseline but requiring the plans be scored by CBO under existing procedures, the Boehner proposal appears to require the Committee recommendations be scored against CBO's current law baseline, which assumes expiration of all the 2001/2003/2010 tax cuts as well as no AMT patch or “doc fix.”

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In order to get beyond the baseline confusion and potential for gimmicks to artificially inflate savings, CRFB has recommended using specific debt-to-GDP levels and corresponding savings targets to ensure that legislation actually achieves the goal of stabilizing and reducing our debt.

As they currently stand, there is a lot of uncertainty with both the Reid and Boehner proposals. Perhaps that is by design, with the intent being to reconcile the two plans and find a consensus. Let's hope -- the debt limit must be raised as soon as possible, and it is time policymakers find common ground in order to make a deal. While these proposals have their differences, as can be seen below, there is much overlap.

Reid Proposal

Boehner Proposal Debt Ceiling Increases

Raises debt ceiling by $2.7 trillion immediately, which would last until 2013 Allows President to request $900 billion increase in debt ceiling, $400 billion immediately and rest subject to vote of disapproval

If more than $1.6 trillion additional savings from special committee enacted, President authorized to request $1.6 trillion debt ceiling increase, subject to vote of disapproval Discretionary Spending

$1.2 trillion in savings over 10 years from discretionary caps

Caps grow roughly with inflation

Firewall between security and non-security spending for FY 2012 and FY 2013

Limits war spending to $450 billion over the 2013-2021 period

Enforcement: 60-vote point-of-order on bill that would cause spending to exceed caps or to increase caps AND automatic, across-the-board cuts if caps are exceeded $1.2 trillion in savings over 10 years from discretionary caps

Caps grow roughly with inflation

Details range for defense spending in FY 2012 and FY 2013

Enforcement: Automatic, across-the-board cuts if caps not met Specified Other Mandatory Savings

$70 billion in other mandatory savings (savings other than from Social Security and federal health programs) $40 billion from program integrity to achieve savings from waste, fraud, abuse $15 billion from spectrum sales $10 - $15 billion from agricultural reforms Higher education reforms whose savings go to Pell Grants

$16 billion from program integrity to achieve savings from waste, fraud, abuse

$13 billion from higher education reforms to go to Pell Grants Special Committee to Identify Additional Savings

Joint, bipartisan committee of 12 lawmakers to "present options for future deficit reduction"

Goal: Reduce deficit to below 3% GDP

Mandate: Make recommendations to meaningfully improve short and long term fiscal imbalance, may include tax reform, shall consider bipartisan plans

Recommendations guaranteed to receive up or down Senate vote under expedited process by the end of the year

Joint, bipartisan committee of 12 lawmakers to report deficit reduction legislation by November 23

Goal: $1.8 trillion in deficit reduction

Mandate: Make recommendations to meaningfully improve short and long-term fiscal imbalance

Enforcement: Second $1.6 trillion debt ceiling increase not authorized without enactment of at least $1.6 trillion additional savings

Recommendations considered under expedited process Balanced Budget Amendment (BBA)

None Requires vote on BBA in House, and subsequent vote in Senate if BBA passes House

Note: This blog has been updated since its original posting.