Tags: Barack Obama | Economic- Crisis | Gang of Six | Debt | obama | Coburn | cantor

Debt Plan Puts 'Gang of Six' Back in Saddle

By Dan Weil   |   Wednesday, 20 Jul 2011 12:51 PM

The obituary written for the “Gang of Six” senators working on a bipartisan solution to the government’s debt morass apparently was a bit premature. A new proposal from the group to slash deficits by $3.7 trillion over the next 10 years has drawn the interest of 43 other senators and President Barack Obama.

Tom Coburn, Gang of Six, debt, deficit
Republican Sen. Tom Coburn's "willingness to sign on to the bipartisan approach signaled that at least some conservatives, having made their principled point, might now be ready to bargain,” The New York Times reports.(Getty Images Photo)
Even House Majority Leader Eric Cantor, who has led the conservative fight against any budget solution that includes tax increases, sees some merit in the plan. It contains “some constructive ideas to deal with our debt,” Cantor said.

In another encouraging sign, conservative Republican Sen. Tom Coburn of Oklahoma turned the gang back into one of six instead of five. Two months after shunning the other five for seeking a deal with inadequate spending cuts, he came back on board.

“Mr. Coburn’s willingness to sign on to the bipartisan approach signaled that at least some conservatives, having made their principled point, might now be ready to bargain,” The New York Times reports.

He agreed to rejoin the group after offering $117 billion in additional Medicare and Medicaid savings.

The gang’s plan resembles last year’s proposals from Obama’s bipartisan fiscal commission: substantial spending reductions accompanied by new revenue through a restructuring and simplification of the income-tax code.

Spending cuts would account for 74 percent of the plan, with increased tax revenue accounting for 26 percent. It would be counted as a tax cut, because it eliminates the alternative minimum tax, gang members said.

Although there isn’t enough time to enact legislation encompassing all of the gang’s ideas as part of a plan to lift the $14.3 trillion ceiling before the debt limit runs out Aug. 2, some could be included as the foundation for a broad budget accord once the debt limit issue is solved.

Republican Tennessee Sen. Lamar Alexander feels positive about the development. “It is early to say, but their timing is good,” he said. “It helps that the three Republicans senators are three of the most conservative, most respected members of the Senate who are Republicans.”

That vote of confidence is significant because Alexander is the third-ranking member of the GOP Senate leadership. Other senators offering support for the plan include Kay Bailey Hutchison, R-Texas; Richard Burr, R-N.C.; Mark Udall, D-Colo.; Michael Bennet, D-Colo.; and Joe Manchin, D-W.Va..

In addition to Coburn, the gang includes Republican Sens. Michael Crapo of Idaho and Saxby Chambliss of Georgia, along with Democrats Mark Warner of Virginia, Richard Durbin of Illinois, and Kent Conrad of North Dakota.

House Speaker John Boehner offered a mixed reaction, indicating that the plan has a ways to go in the House. “This plan shares many similarities with the framework the speaker discussed with the president, but also appears to fall short in some important areas,” he said.

But Obama hailed the gang’s proposal as “good news,” labeling it as “broadly consistent with the approach I’ve urged.”

Durbin expressed cautious optimism. “The Gang of Six plan has not been drafted, nor has it been scored by the CBO [Congressional Budget Office]. It’s not ready for prime time,” he said. “But as a concept, I think we have the starting concepts together and that’s what we presented.”

Fellow gang member Warner said, “We had a very positive reaction. Now we have got to take it to the next step and see how many folks will say more than ‘Atta boys,’ and say, ‘we want to be a part of this effort.’’’

Of course the plan most likely to solve the debt limit issue is one being developed by Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid that would allow the president to lift the ceiling without prior congressional approval of major spending cuts.

McConnell said Tuesday that he doesn’t have enough information yet to form a view on the Gang of Six plan. Reid said he is open to including portions of the plan in the debt ceiling blueprint.

The likely catastrophe that would result from a failure to raise the debt limit has led to some unexpected bipartisanship. On Friday, Boehner dropped by Minority Leader Nancy Pelosi’s Capitol suite for a cordial chat, Politico reports.

To be sure, Pelosi requested the meeting, which amounted to more of an opportunity for each to see where the other stood than a forum for negotiations.

But given conservative opposition in the House to most bipartisan proposals on the debt limit, Boehner realizes he will need Democratic votes to push a plan through his chamber.

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