CBO: Reid plan would cut deficit by $2.2T, raise ceiling by $2.7T

Senate Majority Leader Harry Reid’s (D-Nev.) budget plan would cut the deficit by $2.2 trillion, less than the $2.7 trillion he’d add to the debt limit, according to congressional budget examiners.

The Congressional Budget Office (CBO) estimates Reid’s plan would reduce the deficit by $2.2 trillion over the next decade. Reid had hoped to save $2.7 trillion.

On Tuesday, GOP leaders were forced to rewrite their legislation to raise the debt ceiling when the CBO said Speaker John Boehner’s (R-Ohio) proposal would only reduce the deficit by $850 billion over 10 years, instead of the $1.2 trillion Boehner had estimated.

The CBO score could also force Reid to make changes to his bill, since Republicans are demanding that deficit cuts exceed or be equal to the amount the $14.3 trillion debt ceiling is raised.

Both Senate Democrats and House Republicans are scrambling to find legislation that can be approved by both chambers before Aug. 2, when the Treasury has warned it will run out of money to pay the nation’s bills.

The CBO estimate comes from its March baseline, which takes into account spending cuts approved by Congress in a measure to keep the government operating through the fiscal year that prevented a government shutdown. Both the Reid and Boehner plans were based on an earlier CBO baseline that did not take into account those spending cuts.