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The Capitol Domel in Washington

J. Scott Applewhite/AP

John Boehner, Republican speaker of the House of Representatives, says his plan to end Washington's debt impasse is the "only" serious proposal. Harry Reid, Democratic majority leader in the Senate, says Mr. Boehner's approach is "dead on arrival" if it goes to the upper chamber, at which time Mr. Reid says legislators should embrace his initiative to raise the borrowing limit and narrow the deficit.

The rhetoric in Washington would have you think the Democratic and Republican approaches to this issue are diametrically opposed. Actually, they are remarkably similar.

Both Mr. Boehner and Mr. Reid would achieve the bulk of the deficit reductions by capping discretionary spending. Mr. Boehner would limit non-war discretionary spending to $1.043-trillion (U.S.) in 2012. Mr. Reid's number: $1.045-trillion. Ten years on, Mr. Reid would put a lid on discretionary spending at $1.228-trillion. Mr. Boehner: $1.234-trillion.

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The Republican cuts to discretionary spending would reduce the deficit by $756-billion over 10 years, and the Democratic plan would narrow the deficit by $751-billion, according to the Congressional Budget Office.

There are other similarities. Both Mr. Boehner and Mr. Reid would scrap subsidies on student loans for graduate students, and both would allocate a little extra money to enable government inspectors to crack down on abusers of health programs and social security.

Mr. Reid would also go after tax cheats and those who manipulate unemployment insurance. He also would cut payments to farmers by $11-billion over the next decade. Mr. Boehner is silent on those items.

Bottom line, according to the CBO: the Republican proposal would reduce the deficit by $917-billion over 10 years, while the Senate plan would shrink the budget shortfall by $2.176-trillion.

The difference is Mr. Reid's decision to pad his plan by including savings from the wind up of the wars in Afghanistan and Iraq, which the CBO will save the U.S. government $1.044-trillion.

Of course, there's another important difference. The Republicans say they will only raise the debt ceiling by an amount equivalent to spending cuts in their program. That means there would be another debt-limit vote in 2012. The Democrats are adamant that the Treasury be given enough borrowing authority to get through the 2012 presidential election.

That's the political question on which this debate will be resolved. When it comes to the math, Democrats and Republicans already have found their bipartisan consensus.

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About the Author
Senior fellow at the Centre for International Governance Innovation

Kevin Carmichael is a senior fellow at the Centre for International Governance Innovation, based in Mumbai.Previously, he was Report on Business's correspondent in Washington. He has covered finance and economics for a decade, mostly as a reporter with Bloomberg News in Ottawa and Washington. A native of New Brunswick's Upper St. More

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