It would be nice if both political parties had extensive details to offer on how they would solve the nation's debt limit crisis, but as the week begins, there may not be more than just outlines of what each party wants to do.
Republicans are said to be focusing on a two-step plan, which would
1) Raise the debt ceiling about $1 trillion, enough to last six months, and
2) Provide for $1 trillion in budget savings. No details were offered.
That would be accompanied by a special commission which would work on tax reform and other budget savings, to achieve over $3 trillion in spending reductions.
Democrats are offering a plan that would raise the debt limit by over $2.5 trillion, enough to keep things going until after the 2012 elections.
The plan reportedly would have no tax increases - which is a major concession - but Democrats offered no details on where the cuts would come from.
One thing that you should understand is when both parties talk about budget cuts - they would not happen in the same time frame as the debt limit increase.
For example, whether the debt limit is extended for six months or well over a year, the budget cuts and savings proposed by each party would not fully occur for ten years.
It means that whatever is voted on in coming days by the Congress would be more of a budget framework than anything else, one which could have goals for certain amounts of savings in certain areas.
Also, my description of a budget cut is a bit different than those used by lawmakers in Congress, and that's demonstrated by two working assumption of these talks - one estimates savings of $1 trillion over 10 years by U.S. military withdrawals from Iraq and Afghanistan; the other estimates $800 billion over 10 years in new tax revenues from tax reform, both lowering rates and closing some loopholes.
So when the Democrats say they have offered a plan with no new revenues - that may well include the $800 billion, which Reupblicans had agreed to last week as well.
And let's be clear about that - nobody has really set out much in the way of detail on what provisions would be changed, like the mortgage interest deduction, the write-off for charitable contributions and much more. All we know is that both parties had agreed last week to $800 billion in new tax revenues over 10 years under plans to lower personal and corporate income tax rates as part of overall tax reforms.
Republicans will evidently roll out their plan for lawmkers during a Monday afternoon meeting in Washington.
It wasn't immediately clear when Democrats would release their plan.
What is clear though, is that the clock is ticking towards the August 2 debt limit action deadline.
And there is still no deal.
