The president and senators from both sides of the aisle seemed optimistic that the plan could potentially serve as the basis for a final bipartisan debt-ceiling deal ahead of the Treasury Department’s Aug. 2 deadline.
The so-called Gang of Six is a bipartisan group of six senators that formed out of the ashes of President Obama’s 18-person bipartisan fiscal commission (also known as the Simpson-Bowles commission).
The commission released a report that garnered widespread interest, but failed the 14-vote supermajority needed to send its recommendations to the floor of the House and Senate for debate.
The plan unveiled on Tuesday is largely based on the recommendations of the Simpson-Bowles commission.
While initial details were sketchy, an executive summary of the Gang of Six plan claims that it would stabilize the nation’s public debt by 2014, and reduce it to roughly 70 percent of GDP by 2021.
To do this, the plan proposes implementation of an immediate spending cut of $500 billion as a “down payment” on future spending cuts; dramatic cuts in discretionary spending; strengthening the solvency of Medicare by, among other things, fully paying for the “doc fix” over the next 10 years; reforming the federal tax code by lowering overall marginal rates and abolishing the Alternative Minimum Tax while closing other tax loopholes; tightening the government’s budget processes; and reforming Social Security so that it remains solvent.
During the Tuesday morning White House press briefing, President Obama praised the plan, saying that it takes an approach toward deficit-cutting that mirrored his own opinion that any deficit-reduction plan should contain both spending cuts and revenue-raisers.
“Today a group of senators ... put forward a proposal that is broadly consistent with the approach that I’ve urged,” said Obama.
“What it says is we’ve got to be serious about reducing discretionary spending both in domestic spending and defense, we’ve got to be serious about tackling health care spending and entitlements in a serious way, and we’ve got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something,” the president concluded.
A group of over 50 senators—including an even mix of Democrats and Republicans—attended a briefing by the architects of the plan on Tuesday and also appeared to be initially optimistic.
Senate leaders Mitch McConnell (R-Ky.) and Harry Reid (D-Nev.) failed to give an up-or-down endorsement or dismissal of the plan on Tuesday, instead focusing their efforts on a “last-ditch” option that would give the president authority to raise the debt ceiling if a substantive bipartisan debt-reduction deal isn’t passed by Congress before Aug. 2.
In the House, Speaker John Boehner (R-Ohio) and House Republicans decided to press on with a vote on the “Cut, Cap and Balance Act of 2011,” which, among other things, would make raising the debt ceiling contingent upon Congressional approval of sending a balanced-budget Constitutional amendment to the to the states for ratification.
Even if the bill makes it through the House, it is unlikely to be taken up by the Democratic-controlled Senate, making its prospects for becoming actual legislation rather dim.
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