(Washington, D.C.) - Montana's senior U.S. Senator Max Baucus is calling for compromise to avoid default and bring certainty to working families and small businesses.  Baucus supports the Senate's long-term plan to cut more than $2 trillion in spending and ensure the U.S. can meet its obligations through 2012.  Still, he says both sides of the aisle, and both Houses of Congress, need to come together to pass a compromise as soon as possible. 

"Right now we need two things: serious spending cuts and meaningful certainty.  The Senate compromise gives us both, but that doesn't mean it's the only option.  There are good ideas out there, on both sides of the aisle, so there's no reason we can't reach an agreement on a long-term solution,"  Baucus said.  "What we can't do is keep kicking the can down the road with stop-gap patches. Businesses need to know they'll be able to get the credit they need to make payroll in six months, homeowners need to know they'll be able to pay their mortgage and the world needs to know America is still a great investment."

 The short-term measure the House of Representatives is working to pass includes only $900 billion in spending cuts and fails to provide a solution to meet U.S. obligations beyond the next six-months. Economists have warned that a short-term plan would not provide the certainty needed to preserve America's triple A credit rating and ensure stable interest rates for working families and businesses.

If the debt ceiling is not raised by August 2^nd, the Treasury Department has said the U.S. government will not have enough revenue coming in to cover its obligations. As a consequence government services would be at risk, including Social Security, Medicare, veterans' benefits, troop payments and more. If the U.S. credit rating is downgrades, economists warn interest rates could skyrocket, making it impossible for homeowners to get a mortgage or businesses to get the credit they need to pay their workers.  Baucus has also supported a balanced budget amendment and released county-by-county data last week showing Montana would be hit particularly hard under default. 

What Does the Long-Term Senate Compromise Do?

The long-term Senate solution Baucus supports includes more than $2 trillion agreed upon cuts, and allows the U.S. to continue to meet its obligations through 2012.  The Senate compromise keeps the promise to seniors and military retires, and does not cut Medicare or Social Security or raise taxes . The short-term House plan includes only $900 billion in spending cuts and won't allow the U.S. to meet its. obligations beyond the next six-months.

•  $1.2 Trillion in Discretionary Spending Cuts. The $1.2 trillion in discretionary spending cuts include both defense and non-defense spending.It does not cut Medicare or Social Security.

• $100 Billion in Mandatory Savings. Again these savings keep the promise to seniors and military retirees and do not cut Medicare and Social Security benefits. Savings include:

• $40 billion in cutting out fraud, waste and abuse in programs like unemployment insurance.
• $15 Billion In Spectrum Sales. This provision would save money by allowing the Federal Communications Commission (FCC) to auction portions of the radio spectrum.
• $11 Billion In Agricultural Reforms.  Baucus fought hard to ensure the ag cuts in this proposal were less than the $48 billion in Farm Bill cuts proposed in the House. 
• Higher Education Program Reforms Whose Savings Go To Sustain The Pell Grant Program. The proposal fills a shortfall in the Pell program for fiscal years 2012 and 2013, to maintain the current maximum Pell level of $5,550. 

•  $1 Trillion in Savings From Winding Down the Wars in Iraq and Afghanistan to focus on fighting terrorism and strengthening America, not nation building overseas.
•  $400 Billion in Interest Savings. By cutting spending, this package reduces the U.S. deficits, and reducing our deficits reduces the interest the federal government must pay on our debt each year.
•  Establishes Joint Congressional Committee to Find Future Savings. In addition to almost $2 trillion in concrete savings, the Senate package will establish a joint, bipartisan committee, made up of 12 members, to present options for future deficit reduction. The committee's recommendations will be guaranteed an up-or-down Senate vote, without amendments, by the end of 2011.

Contact: Kate Downen 406-224-5056/Jenny Donohue 202-224-4515/Kathy Weber 406-657-5915

# # #