NEW YORK (MainStreet) — An analysis by the Congressional Budget Office has found that the tentative debt agreement backed last night by President Barack Obama and Congressional leaders would save the nation at least $2.1 trillion during the next decade.
The analysis reveals details about what the debt ceiling-budget bill actually contains. According to the CBO, $917 billion in cuts are outlined in the plan, which establishes caps on discretionary spending that include reducing funding related to the wars in Afghanistan and other overseas contingency operations. It also allows for certain amounts of additional spending on initiatives aimed at reducing the amount of improper benefit payments by allocating funds to such programs as Social Security, Medicare, the Internal Revenue Service and Department of Labor to combat fraud and reduce waste.
The bill would also save a total of $31.2 billion between 2012 and 2021 through changes to the Pell Grant and student loan program. This includes eliminating the subsidized loan program for graduate students as well as loan repayment incentives.
The CBO also estimates that an additional $1.2 trillion would be saved during the 10-year period by the decisions of a Congressional Joint Select Committee. Should the committee, established in this legislation, fail to reach a compromise, automatic cuts would be triggered to meet the savings target.
The CBO’s analysis also confirms that the plan would increase the debt limit by $400 billion initially, with two additional increases built in for a cumulative increase of between $2.1 trillion and $2.4 trillion.
The bill, however, still needs to be formally approved by the House and Senate before the changes go into effect. As of press time, no votes had been scheduled.
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