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article imageBoehner claims Senate debt ceiling bill has 'phony accounting'

By Michael Krebs     Jul 26, 2011 in Politics
Washington - With the August 2 debt ceiling deadline just a week away, Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) presented their slightly different bills within their respective congressional chambers.
Global financial markets appeared to be somewhat tame on Tuesday, as investors demonstrated faith in the U.S. federal government that the debt ceiling would be raised without any meaningful disruption to interest rates or to other financial transactions. However, in Washington D.C. the political gridlock continued.
Speaker John Boehner (R-OH) characterized the latest debt ceiling plan backed by Senate Majority Leader Harry Reid (D-NV) as riddled with "phony accounting and Washington gimmicks," according to a Fox News report.
"The House has passed a bill to raise the debt limit with bipartisan support. And this week, while the Senate is struggling to pass a bill filled with phony accounting and Washington gimmicks, we will pass another bill -- one that was developed with the support of the bipartisan leadership of the U.S. Senate," Boehner said, as Fox News reported.
But Senator Reid saw Congressman Boehner's position as a Tea Party front, suggesting the Democratic-sponsored Senate plan was best for the nation.
"Speaker Boehner's plan is not a compromise," Reid said, addressing reporters on Tuesday. "It was written for the Tea Party and not the American people."
The two congressional leaders are not far apart. Senator Reid's plan calls for a total deficit reduction of $2.7 trillion over 10 year, while Mr. Boehner's plan seeks $3 trillion in cuts over 10 years. Both plans incorporate $1.2 trillion in discretionary spending cuts.
Neither plan calls for additional taxes, but the baseline measurement of what constitutes additional taxes differs depending on varied national economic growth estimates.
However, the differences are found in the details. Reid seeks $1.5 trillion in other cuts, including $1 trillion in war costs; $100 billion in mandatory spending, without touching Medicare, Medicaid or Social Security; and $400 billion in interest savings. Boehner's additional cuts of at least $1.8 trillion would be identified later, most likely through tax reform and through changes in entitlement programs.
President Obama still insisted that any debt ceiling measure come with additional tax revenues.
"We can't allow the American people to become collateral damage to Washington's political warfare," Obama said, according to Fox News.
More about Boehner, Senate, Debt ceiling, National debt, Harry reid
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