Tags: Senators | Fiscal | Cliff | economy

Senate Group Steps Up Efforts to Avoid Year-End Fiscal Cliff

Thursday, 07 June 2012 01:39 PM EDT

A group of U.S. senators who proposed a $3.7 trillion deficit-reduction plan last year is courting a broader cast of lawmakers to try to avert a fiscal collision at the end of this year.

The lawmakers are seeking to address the expiration of tax cuts enacted under President George W. Bush and agree on spending cuts and changes in entitlement programs to avoid $1 trillion in automatic spending cuts set to begin taking effect in January.

Last year the bipartisan “Gang of Six,” led by Senators Mark Warner, a Virginia Democrat, and Saxby Chambliss, a Georgia Republican, agreed on a broad set of principles though the group never offered a full tax-and-spending proposal.

In an interview Wednesday, another member of the group of six, Democrat Kent Conrad of North Dakota, said the goal is for at least 12 members to agree to a more detailed plan.

“We have a draft,” he said. “It’s not agreed to. It’s not signed off on, but we have a draft.”

An expanded group of 34 senators met June 5 with economic leaders Bill Dudley, president of the Federal Reserve Bank of New York, and Robert Zoellick, president of the World Bank, according to a Democratic leadership aide. The group of six lawmakers has met regularly since last year’s negotiations over raising the debt limit, though this was the first larger meeting they hosted in a few months.

Gregg, Bowles

Later this month, former New Hampshire Republican Senator Judd Gregg and former Democratic White House Chief of Staff Erskine Bowles will brief senators, Conrad said.

Bowles and former Republican Senator Alan Simpson of Wyoming were co-chairmen of a budget and deficit task force appointed by President Barack Obama and advanced their own proposal, which wasn’t embraced.

Today, Conrad said he doesn’t expect the group to unveil a budget plan until after the November election unless something changes that endangers the economy.

About one-third of the Senate attended this week’s session, although some of the participants said they were skeptical the group would succeed in advancing a grand bargain.

Senator Joseph Lieberman, a Connecticut independent, called the efforts “really a roll of the dice.” Lieberman, speaking at a Bloomberg Government breakfast, said there will be significant pressure on lawmakers after the election to do something in a short period.

Extend Everything

“The unfortunate most probable scenario is that we just extend everything for six months or a year,” Lieberman said.

Senator John Cornyn, a Texas Republican who also attended the most recent meeting, said that while the talks were “constructive,” the bipartisan effort probably will go nowhere unless Obama urges lawmakers to reach a broad deficit-reduction deal.

“Without presidential leadership, it’s pretty much in vain,” said Cornyn, who leads Senate Republicans’ campaign efforts. “Only the president can provide the political cover and the leadership necessary to get something done.”

Opposition to revenue increases among Republicans, particularly Tea Party lawmakers in the House, also stands in the way of a grand bargain.

Senator Jim DeMint, a South Carolina Republican and co- founder of the Senate Tea Party Caucus, said Thursday in an interview that he had been coordinating with Tea Party Republicans in the House and Senate to galvanize opposition to any deficit-reduction plan that raises taxes.

’Bogus Cuts’

“I just hope that Republicans don’t get in some kind of Gang of Six and announce some tax increase with bogus cuts,” DeMint said. “This is just not the time to do more bipartisan compromises that increase spending and debt — and that’s what all the compromises have been so far.”

DeMint said he would be “very surprised” if a broad deficit-reduction agreement could be reached before the end of the year.

© Copyright 2024 Bloomberg News. All rights reserved.

Thursday, 07 June 2012 01:39 PM
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