The largest single difference between the bills as currently written is the way they allocate new borrowing authority to the president. The Senate bill raises the debt limit by $2.7 trillion in one fell swoop. The House bill sets up an elaborate process to raise the debt limit through 2012. First, it authorizes $900 billion in new borrowing authority -- enough to get the country into next year -- subject to a largely symbolic vote of disapproval by the Congress. President Obama must claim that authority before the end of the year. When it runs out, he can only exercise the rest of the new borrowing authority -- $1.6 trillion worth -- if and when Congress passes, and he signs, legislation to reduce the deficit by $1.8 trillion. That debt limit extension, too, is subject to a vote of disapproval by Congress.
There are two reasons for this Rube Goldberg approach. One is simply to embarrass the President and force Democrats to take votes that can be turned into 30-second ads this election season. The other, though, is to achieve deep cuts in Medicare and Medicaid under the threat of default.
That's about where the differences end -- which renders silly any claim that one version is acceptable and the other a sham.
Reid's plan nominally cuts the deficit by significantly more than Boehner's . But to do that it relies on savings from winding down the wars in Iraq and Afghanistan -- savings the country will likely realize no matter which plan passes. Take that away, and it's hard to tell the difference between them.
Both plans impose caps on discretionary spending using slightly different mechanisms. The non-partisan Congressional Budget Office estimates that those caps will result in reduced outlays over the next 10 years -- in Boehner's bill by $756 billion, in Reid's by $751 billion.
(Note, Reid's bill has not been finalized, and thus these numbers will change very slightly. Boehner's bill has already been adjusted once when it initially scored far less in savings than he'd originally promised.)
Both plans achieve small savings in similar mandatory spending programs -- ferreting out health care fraud, Pell Grant cuts that would be funneled back into the program, and a few other changes. Reid's plan contains $41 billion in savings over 10 years in this way. Boehner's $20 billion.
These similarities, some aides and members believe, indicate that a final solution will look something like this: Republicans will have to relent a bit on the two-step debt limit process, so that the government is all-but guaranteed to be able to issue new debt through 2012. Democrats will agree to some sort of trigger mechanism, to assure that entitlement and tax reforms actually happen sometime in the next several months -- the Gang of Six plan could be expedited, or perhaps the plan authored by the co-chairs of President Obama's fiscal commission.
A couple of caveats here. First, the appropriations themselves have not been decided upon. So though the two bills cap annual spending in similar ways, they do not spell out what programs will have to be cut as a result. And because this legislation won't bind a future Congress, a future Congress could undo the caps and spend more money, undoing the savings.
This explains why Boehner's having such a hard time whipping conservative support for the plan. Among the members who refused to raise the debt limit without also enacting the radical Cut, Cap, and Balance plan, this one seems positively profligate.