Updated 5:33 p.m. ET – Reporting from Capitol Hill |House Speaker John Boehner, surrounded by House Republican leaders, unveiled Monday the GOP proposal to raise the debt limit in two steps — once now and once this winter — which is at odds with the plan just introduced by Senate Democrats and supported by the White House.
In introducing his new plan, Boehner said it adheres to the principles of the “Cut, Cap and Balance” bill that passed in the House and failed in the Senate last week.
“This legislation reflects a bipartisan negotiation over the weekend,” Boehner said.
“It does ensure that the spending cuts will be greater than the debt limit and there are no tax increases as part of this plan … I think it would be irresponsible for the president to veto such legislation because its a common sense plan and will help us avoid default,” Boehner added.
Boehner dismissed the Reid plan, saying it was “full of gimmicks” and that it doesn’t make real changes to the spending structure of the government or address entitlement spending.
The new plan would require the House and Senate to vote on a balanced budget amendment and require a joint commission to address how to cut spending over the long term before the next increase in the debt ceiling, Boehner said.
According to the Washington Post, the GOP plan would increase the debt limit by $1 trillion while cutting spending $1.2 trillion. The commission would be charged with finding $1.8 trillion by the time the debt limit runs out again next year.
President Obama and Reid have vowed to block any short-term debt limit increase.
Posted 3:45 p.m. ET | Senate Majority Leader Harry Reid officially unveiled the outlines of his debt reduction proposal Monday afternoon at the U.S. Capitol — as expected, it would cut $2.7 trillion from the deficit over 10 years, extend the debt ceiling through 2012 and does not increase government revenue.
The White House released a statement announcing President Obama’s support for the approach, which largely adheres to the primary demands from House Republicans – a dollar-for-dollar match in debt ceiling increase to deficit reduction, and no increase in taxes.
“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,” White House Press Secretary Jay Carney said in a statement.
But it also satisfies a key position for the Democrats: that the debt limit be extended beyond the 2012 elections, preventing another debt limit showdown during an election year.
“This proposal satisfies Democrats’ core principles by protecting Medicare, Medicaid and Social Security and (provides) a long-term increase in the debt ceiling the markets are looking for,” Reid said Monday.
The announcement will send a strong signal to House Speaker John Boehner that the Senate and White House would not support his two-step process that would see the debt ceiling limit debate revisited again sometime in the winter.
“The two-step plan outlined by Speaker Boehner is a dodge. It kicks the can down the road. It resolves debt ceiling only for next few months and we’d be right back at square one all over again,” Sen. Charles Schumer, D-N.Y., said Monday.
Reporters were provided with a broad outline of the plan: $1.2 trillion in cuts would come from defense and non-defense discretionary spending. Details were not provided, other than the cuts were previously agreed to during the debt talks led by Vice President Biden last month.
The rest of the cuts would come from a projected reduction in interest payments to the tune of $400 billion, $10-15 billion in “agricultural reforms” and $1 trillion from winding down the wars in Iraq and Afghanistan, among other cuts.
The plan would also establish a joint Congressional committee to identify savings in the future. The proposals of the 12 member panel of House and Senate members would be guaranteed an up or down vote in the Senate by the end of the year.
Boehner and House Republicans were scheduled to speak at 4 p.m. ET about the debt limit debate, stay tuned.