Committee for a Responsible Federal Budget

Updated Boehner Proposal

Jul 27, 2011

Speaker of the House John Boehner has released an updated version of his debt ceiling proposal which, according to a new CBO score, achieves an extra $66 billion in deficit reduction, totaling $917 billion in savings. The difference comes from $46 billion more savings from his discretionary caps -- achieved by removing the outlay caps originally included in the plan for FY 2012 and 2013 -- and from $20 billion more in interest savings as a result of the increased discretionary savings.

As we pointed out in our blog earlier today, the outlay levels projected by CBO for FY 2012 and 2013 in its scoring of the Boehner plan were equal to the outlay caps included in the plan. However, CBO's score of the plan produced by Senate Majority Leader Harry Reid -- which includes nearly identical budget authority caps in FY 2012 and 2013 as those in the Boehner plan but which did not include outlay caps for those years as Boehner did -- included lower outlay levels for FY 2012 and 2013 (and therefore higher savings) than those scored for the Boehner plan, seemingly as a result of not having outlay caps. This may seem counter intuitive, since one would assume outlay caps on top of budget authority caps would only reinforce savings -- not decrease savings. As we suggested earlier, CBO seems to have assumed that appropriators would likely hit the outlay cap even if it meant having a different mix of appropriations than they otherwise would have under a no-outlay-cap scenario.

So to increase his savings total, Boehner simply removed the outlay caps in his plan, increasing discretionary savings by $46 billion and his interest savings by $20 billion (a high amount, since the discretionary savings are in the early years of the ten-year period).

Here is an updated version of the chart we posted earlier, including the scores for the updated Boehner plan:

Ten Year Savings Under Updated Boehner and Reid Plans (billions)
ProvisionUpdated Boehner Savings
Reid Savings
Discretionary Spending Caps-$756-$752
Cap Adjustments for Program Integrity$15$51
Subtotal, Discretionary Caps-$741-$701
Program Integrity Savings-$16-$18
Pell Grants$17$18
Other Education-$22-$18
Agriculture Programs$0-$11
Subtotal, Mandatory-$20-$29
Revenues (Program Integrity)*$0$43
Interest Savings-$156-$153
Total -$917-$927
War Savings$0-$1,044
Interest Savings$0-$223
Total Including War-$917-$2,194

*Reid program integrity includes $14 billion above the baseline for IRS efforts aimed at increasing tax compliance. Savings from this score as increased revenues of $43 billion. 

Note: This blog has been updated to reflect CBO's comparison table of the two plans, which has slightly differen interest projections for war and non-war under Reid's plan.