President Obama likes it. A wide array of Senators, including influential conservative Tom Coburn (R-OK), have given it their blessings. Out of nowhere, the Gang of Six’s bipartisan plan for addressing the country’s fiscal imbalance has returned from legislative hinterlands — and has become the only viable, publicly available framework by which Congress can make good on its supposed desire for a grand bargain on deficit reduction.
But according to an aide briefed on the Gang of Six’s negotiations, the fledgling framework is still too new and incomplete to be included in a package to raise the debt limit before August 2nd — and it’s more likely to become the basis for a bigger-deal in the weeks and months ahead.
“It will play into getting us through August 2nd in absolutely no way,” the aide said. Senators on Tuesday, according to the aide were given “a briefing on a framework of what could become a plan,” but the imperative now is to get the debt limit raised one way or another.That statement was later echoed by Gang of Six member Dick Durbin (D-IL).
A summary of the plan, provided to TPM, leaves a lot of questions unanswered. It leaves a lot of the heavy lifting to legislators, by requiring committees to author specific savings over the coming months. It only guarantees an immediate $500 billion downpayment on deficit reductions via undisclosed cuts. And its ambiguity on the question of whether it would raise new tax revenue means it will face skeptics in the GOP-controlled, conservative House of Representatives.
Thus it’s unlikely that the plan will be fast-tracked through Congress as part of a bipartisan deal to raise the debt limit and avoid a default on U.S. payment obligations. But its future beyond that is much rosier.
“I think 60 people will support it,” Coburn said, on his way out of the morning briefing.
Weeks ago, Coburn left the Gang of Six over disagreements about the how deeply to cut into Medicare. But he says he’s encouraged by the progress the group made in his absence and now wants to realign himself with the other five members. “This creates the way forward, to where we can solve our problems. This is 3.7 trillion dollars of real reduction over the next 10 years. A large down payment on that — if this doesn’t come together in the Senate and the House doesn’t work their will, we still get $500 billion. It is a trillion dollars in revenue increases, but the way it will be scored is a $1.5 trillion tax cut. Because [the Alternative Minimum Tax] is gone.”
The aide noted, “it depends on what baseline you use…talking about it as a $1.5 trillion tax cuts is important when we’re talking to moderates and conservatives.”
The plan would also address Social Security’s long-term shortfalls, through undisclosed reforms, on a separate table, so that any cuts or revenues would be funneled back into the Social Security Trust Fund to keep it solvent. We should have wider weigh-in on the plan’s near-term and future viability this afternoon, and will update you as quickly as possible.
The Gang of Six convened in the aftermath of the President’s bipartisan commission on fiscal reform, which failed to reach a consensus agreement on a deficit reduction plan, but did unveil the Simpson-Bowles report — named after its co-chairs, former Sen. Alan Simpson (R-WY), and Erskine Bowles, a former Clinton Chief of staff. The original members were Durbin and Coburn, along with Sens. Kent Conrad (D-ND), Mark Warner (D-VA), Saxby Chambliss (R-GA), and Mike Crapo (R-ID).