A control method for selecting an optimal multiple step operating mode for a multiple cylinder motor vehicle engine system having variable lift includes prioritizing each of a full torque capacity (FTC) mode having all cylinders operating at high lift, a first reduced capacity economy mode (RCE1) having all cylinders operating at low lift, and a second reduced capacity economy mode (RCE2) having fewer than all of the cylinders operating at low lift with at least one cylinder deactivated based on predicted fuel economy of each of the modes. Multiple constraints are applied to each of the prioritized modes including incorporating boost as one of the constraints by calculating a maximum torque capacity for each mode that is a function of a current boost pressure. A mode determination arbitration is conducted to identify if a change in mode is required.