So in summary, the best case is that the bill reduces the deficit by about $8 billion this year. The worse case is that it adds about $3 billion to the deficit this year. Neither is anywhere close to $85 billion in deficit reduction this year.Well now the CBO score is out and it is in fact worse than I thought. Let's start with spending. The Senate bill increases spending relative to the baseline with the sequester included by $63 billion. In other words, it eliminates $85 billion in spending reductions in 2013 and replaces them with $22 billion in net spending reductions over the next 10 years. And of this $22 billion, only $5 billion (net) comes in the next 5 years.
On the tax side, it adds $55 billion of tax increases, almost all of which come from the application of a new alternative minimum tax, beginning at incomes of $1 million.
So to review, the bill as scored by the CBO, replaces $85 billion in deficit reduction in 2013 achieved by spending reductions with $400 million of deficit increase in 2013 (a small spending increase almost offset by a small tax increase) and $77 billion of deficit reduction over the next 10 years, 72 percent of which ($55 billion over $77 billion) is tax increases.
So the "balanced proposal" of the Senate achieves no deficit reduction in 2013, less deficit reduction over 10 years than the sequester would achieve in 1 year, and has more than 70 percent of the deficit reduction coming from tax increases.
A replacement it is not.