July 25, 2011 in Nation/World, News

Obama to address nation on deficit reduction proposal

Associated Press
 
Comparing the proposals

The plan by Senate Democrats would cut spending by $2.7 trillion over the next decade, while increasing the government’s ability to borrow by $2.4 trillion.

— Extends borrowing authority through 2012.

— Cuts $1.2 trillion from discretionary programs. These are the day-to-day operating budgets, grants and programs of government agencies, such as the Interior, Education Justice and Defense departments and the Environmental Protection Agency.

— Claims savings of $1 trillion from winding down the wars in Iraq and Afghanistan.

— Saves $400 billion from lower interest payments.

— Cuts $100 billion from mandatory programs, including agriculture, Fannie Mae and Freddie Mac. Includes savings from reducing waste, fraud and abuse.

— Creates a bipartisan legislative committee to recommend future cuts, with a guarantee that if the panel can agree on a plan, it will receive a vote in Congress.

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The plan by House Republicans would reduce spending by $1.2 trillion over 10 years, while increasing the government’s ability to borrow by about $1 trillion.

— Extends borrowing authority until about February.

— All cuts would come from the day-to-day operating budgets of government agencies, known as discretionary programs.

— Imposes caps on future spending.

— Requires the House and Senate to vote on — but not necessarily pass — a balanced budget constitutional amendment by the end of 2011.

— Creates a bipartisan legislative committee to recommend $1.8 trillion in future cuts to programs such as Medicare, Medicaid and Social Security, in exchange for increasing the government’s ability to borrow an additional $1.6 trillion.

The White House says President Barack Obama will address the nation at 6 p.m. Pacific time Monday to discuss the approaching debt limit deadline and an apparent political stalemate over deficit reduction proposals.

White House spokesman Jay Carney announced the address after House Republican and Senate Democratic leaders unveiled competing plans to meet an Aug. 2 deadline to raise the government’s borrowing authority.

Obama is supporting a proposal by Senate Majority Leader Harry Reid that would trim $2.7 trillion of government spending over 10 years.

Reid’s plan does not include new tax revenue, as Obama has demanded. But unlike the GOP plan, it would extend the debt ceiling into 2013 — an Obama ultimatum. The House plan trims about $1.2 tillion but would only extend the debt ceiling for less than a year.

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