Rival plans to cut spending: The details

AP News
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Posted: Jul 26, 2011 9:55 AM
Rival plans to cut spending: The details

Senate Democrats and House Republicans are pushing rival plans to reduce future budget deficits and avert a potential government default next week. Neither plan raises taxes or cuts major benefit programs such as Medicare, Medicaid or Social Security.

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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.