By Alexander Bolton - 07/25/11 08:00 PM EDT
Senate Democratic leaders on Monday unveiled a $2.7 trillion deficit-reduction plan that includes an array of savings Republican leaders have already endorsed, and dared the GOP to vote against it.
Senate Majority Leader Harry Reid (D-Nev.), who crafted the plan, said he filled it with concessions to Republicans so they would have no justification to reject it.
“This proposal satisfies Democrats’ core principles by protecting Medicare, Medicaid and Social Security and providing a long-term extension of the debt ceiling that the markets are looking for,” Reid said.
“The bill also meets Republicans' demands,” he added, noting that it would not raise tax revenues and cuts spending by more than it raises the debt limit.
“So now all Republicans have to do is say ‘yes,’ ” Reid said.
But Reid said Republican leaders would have to overcome the pressure of Tea Party “extremists.”
“The time for ideological extremism should end. Now is the time for cooperation and consensus building and that’s what legislation is all about — the art of compromise — and they’ve got to break away from the extremists that seem to be running the Republican Party in Washington.”
The White House immediately praised Reid’s plan.
“Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court,” said White House press secretary Jay Carney shortly after Reid’s news conference.
Reid said he would bring the proposal to the floor Monday evening.
About $1.2 trillion in the plan would come as discretionary spending cuts to defense and non-defense programs that Democrats say House Speaker John Boehner (R-Ohio) already agreed to during negotiations with President Obama.
Another $100 billion would come from cuts to mandatory spending programs already negotiated by Vice President Biden and congressional Republican leaders.
Reducing waste, fraud and abuse would amount to $40 billion in so-called program integrity savings, while reforms of Fannie Mae and Freddie Mac, agriculture programs, the Universal Service Fund and spectrum sales would account for another $60 billion.
Most controversially, it would count $1 trillion from winding down the wars in Iraq and Afghanistan. The Congressional Budget Office (CBO) estimates these will cost more than $1.6 trillion over the next decade. Democrats say only $630 billion would go to prosecute those military missions over 10 years.
About $400 billion would come from interest savings, most of it from reduced debt because of cuts to discretionary spending programs.
The plan would also establish a joint congressional committee made up of 12 members from both parties to recommend other deficit-reduction proposals. Its recommendations would receive guaranteed up-or-down votes on the Senate floor.
Sen. Charles Schumer (D-N.Y.), who introduced the plan alongside Reid, said it “offers real potential to finally, finally break this impasse.”
He said it includes many hard sacrifices for Democrats.
“This is a serious belt-tightening that will have consequences for years to come,” he said.
Republicans have argued that savings from the ramping down of military operations should not count as a cut because U.S. forces were expected to reduce their footprint regardless of a deficit-reduction deal in Congress.
But Reid and Schumer were quick to point out that House Republicans counted the war savings in the budget plan they passed earlier this year.
“The administration tells me with the wind-down they’re putting into place in Iraq and Afghanistan they can prosecute the wars on about $630 billion over the next decade,” Schumer said, a saving of more than $1 trillion compared to the $1.67 trillion the CBO estimates the nation will spend on those conflicts.
“We know the Republicans agree with this math because they included the exact same savings in the Ryan budget that passed the House. They never criticized such accounting then — it’s hard to see how they could do so now,” Schumer said.