At this point it’s just a formality. Just about every agreed-to spending cut and deficit reduction provision in the debt limit bill had already been scored, leaving the outcome in little doubt.
But the Congressional Budget Office has weighed in and confirms that the debt limit deal will reduce deficits by over $2.1 trillion at a minimum over 10 years.
The total savings come from a combination of up-front domestic and defense cuts, and a placeholder. The legislation creates a congressional committee that will be required to write a passable deficit reduction package of at least $1.2 trillion. If it doesn’t reach that goal, though, a number of politically tough automatic spending cuts will take effect — either way CBO views those savings as locked in.
Here’s the key paragraph:
In total, if appropriations in the next 10 years are equal to the caps on discretionary spending and the maximum amount of funding is provided for the program integrity initiatives, CBO estimates that the legislation–apart from the provisions related to the joint select committee–would reduce budget deficits by $917 billion between 2012 and 2021. In addition, legislation originating with the joint select committee, or the automatic reductions in spending that would occur in the absence of such legislation, would reduce deficits by at least $1.2 trillion over the 10-year period. Therefore, the deficit reduction stemming from this legislation would total at least $2.1 trillion over the 2012-2021 period. Those amounts are relative to CBO’s March 2011 baseline adjusted for subsequent appropriation action.
