Former CBO Director Douglas Holtz-Eakin: Harry Reid Fake savings Could Get U.S. Credit Downgraded

President Obama is supporting Harry Reid's plan. The problem is the credit markets want to see real spending cuts.

(Fox News) - “The way the CBO constructs the baseline is it extrapolates current law, and the current law is that we are funding the wars in Iraq and Afghanistan,” former CBO Director Douglas Holtz-Eakin told FoxNews.com. “The trouble is that CBO’s baseline is not what anyone really thinks will happen.”

Holtz-Eakin said that while Reid’s proposal is transparent about including war savings, the problem with employing it here is that ratings agencies want to see “real savings” out of the current talks.

“I don’t think it’ll be compelling to markets or ratings agencies,” he said. “Since this spending was going to go away anyway, it would not constitute an improvement. And they want improvements.”