–House Speaker Boehner: Reid Plan Full of ‘Gimmicks’
–Says Sen. Reid Plan Doesn’t Tackle ‘Drivers’ of Debt
–House GOP Plan Is ‘Less Than Perfect’
–House Expected To Vote Wednesday on New House GOP Plan

By John Shaw

WASHINGTON (MNI) – House Speaker John Boehner said Monday the
two-step debt ceiling increase plan that he is now pushing is “less than
perfect,” but is the best way to secure passage of a debt ceiling
increase to avoid default.

At a briefing with House GOP leaders, Boehner said his package is a
“good step in the right direction.”

Boehner’s plan would raise the debt ceiling by $1 trillion this
year and $1.6 trillion next year.

Under Boehner’s approach, passing the initial $1 trillion debt
ceiling increase would require Congress to pass $1.2 trillion in
spending cuts through imposing caps on discretionary spending.

Approval of the second tranche of $1.6 trillion would require
passage of $1.8 trillion in spending cuts in entitlement programs.

Under Boehner’s plan, the House and Senate would also have to vote
on a balanced budget constitutional amendment between this October and
the end of the year.

The House is expected to vote on the new Republican plan Wednesday.

Boehner blasted a new budget proposal by Senate Majority Leader
Harry Reid, saying it is “full of gimmicks” and fails to tackle “the
drivers” of federal spending and growing debt — the largest entitlement
programs.

Reid said earlier in the day that he will propose a debt ceiling
bill that would cut spending by $2.7 trillion over ten years and allow
for passage of a $2.4 trillion debt ceiling increase.

“The proposal provides everything the House Republicans have said
they needed for an agreement to avert default and cut the deficit,” Reid
said.

“I hope they will remember how to say yes,” Reid said.

Reid’s plan calls for $1.2 trillion in discretionary savings, $1
trillion from winding down the wars in Iraq and Afghanistan, $400
billion in interest savings and $100 billion in entitlement savings.

Of the $100 billion in entitlement savings, $40 billion comes from
program management reforms, $30 billion from Fannie Mae and Freddie Mac
reforms, $15 billion in spectrum sales, and between $10 and $15 billion
in agriculture reforms.

It is unclear when the Senate will begin debating the Reid plan.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Tim Geithner has said that Congress must pass
legislation increasing the debt ceiling by August 2.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$,M$$CR$]