Gang of Six Unveils Plan – The bipartisan Gang of Six senators that had been left for dead when one of its members left the group earlier this year quickly sprang back to life on Tuesday when Sen. Tom Coburn (R-OK) rejoined the group and it unveiled its long-awaited plan to colleagues. The plan has been well received on both sides of the Senate aisle and the White House. Members of the Gang are in the process of briefing their colleagues in the House. The plan offers a path forward in reducing the deficit by about $3.7 trillion over ten years with sensible changes to all areas of the federal budget. The Gang has rejuvenated hopes that a comprehensive fiscal plan can be achieved along with a debt limit increase. Read CRFB’s statement on the Gang of Six plan and our thoughts on what needs to come out of the debt ceiling talks.
House Votes for Cut, Cap and Balance – The House late Tuesday passed the “Cut, Cap and Balance” bill on a largely party-line 234-190 vote. Republicans hailed the measure as the best approach to reducing the national debt, while Democrats feared it would result in massive cuts to important programs. The legislation would increase the debt limit by $2.4 trillion in exchange for significant cuts in FY 2012 federal spending, capping spending as a percentage of the economy for ten years, and a balanced budget amendment. The Senate will vote on the bill Friday or over the weekend, but it is not expected at all to pass, and President Obama has promised to veto it if it somehow does. Congress may also hold votes on balanced budget amendments in the next few days. Budget process tools do have an important role to play in reducing the deficit, and the Peterson-Pew Commission on Budget Reform has offered a blueprint in Getting Back in the Black. The Commission has also provided a Fiscal Toolbox that summarizes and compares fiscal tools like spending caps, balanced budget amendments and debt triggers along with a one-stop resource on the topic. However, with time running short, the focus right now should be on agreeing on a comprehensive fiscal plan and then discussing budget process reforms to best implement it.
Senate Leaders Finalizing Fallback Plan – Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) say they are close to completing their “Plan B” option that would allow the debt limit to be increased in three installments. One of the Gang of Six members, Sen. Mark Warner (D-VA), is meeting with Reid to discuss the Gang’s plan and how possibly parts of it could be incorporated into the Reid-McConnell approach.
No Limit to Talks on Debt Limit – Negotiations continue towards a deal to raise the debt limit while reducing the deficit. President Obama meets separately today with congressional leaders from both parties. Earlier today Obama said that he would be willing to accept a short-term debt limit increase if both parties had agreed to a broader deficit reduction deal that required more time to enact.
Students Become Teachers – Over 100 university student body presidents have signed on to a letter to leaders in Washington asking them to agree on a bipartisan approach that raises the debt limit and reduces the deficit. The group will publicly release the letter on Thursday at the National Press Club.
More Plans Added to the Mix – In addition to the Gang of Six proposal, budget plans also have been presented in recent days by Senate Budget Committee Chair Kent Conrad (D-ND) and Senator Coburn. And today, CRFB board member and Comeback America Initiative founder David Walker released a plan. You can easily compare all the proposals out there using CRFB’s comparison tool.