President Obama Tuesday endorsed a $3.7 trillion bipartisan deficit-reduction plan as Washington raced to avert national default.
The "Gang of Six" proposal, similar to one offered in December by panel led by Democrat Erskine Bowles and Republican Alan Simpson, gained new life Tuesday as Sen. Tom Coburn, R-Okla., rejoined the group after an earlier walkout, Politico reported.
The other "gang" members are Sens. Mark Warner, D-Va.; Saxby Chambliss, R-Ga.; Kent Conrad, D-N.D., Mike Crapo, R-Idaho, and Richard Durbin, D-Ill.
The proposal would slash spending by $500 billion immediately, overhaul entitlement programs like Medicare, rework the tax code, and make major changes in Social Security to keep it solvent for 75 years, The Wall Street Journal reports.
House Republicans vow to oppose any measure that raise taxes. The plan would bring in $1 trillion in new revenue over a decade by limiting several tax breaks, but Conrad said it would also lower tax rates and end the alternative minimum tax.
Conrad said the overall plan uses 74 percent spending cuts and 26 percent new taxes to close the gap.
U.S. Joseph Lieberman, Ind-Conn., was among the many senators praising the plan after a meeting with the "Gang of Six" Tuesday.
"We've gone from a 'Gang of Six' to a mob of 50," Sen. Joe Manchin, D-W.Va., told The Washington Post.
Meanwhile, the House is moving to vote Tuesday night on the Republicans' "Cut, Cap and Balance Act," which would cut spending by $5.8 trillion over 10 years, cap future spending and make Congress pass a balanced-budget constitutional amendment before raising the debt ceiling. It is expected to fail in the Democratic-controlled Senate, and Obama said Monday he would veto it.
"Were in the 11th hour, and we don't have a lot more time left," Obama said Tuesday. "We don't have any more time to engage in symbolic gestures."
"But I understand the need for (House Republicans) to test that proposition," he said.
Obama then urged congressional leaders "to start talking turkey and actually getting down to the hard business of crafting a plan that can move this forward in time for the Aug. 2 deadline."
The White House has said all sides need to reach a deficit-reduction deal by Friday to give Congress time to vote on raising the government's $14.3 trillion borrowing limit by Aug. 2.
That is when Treasury Department officials say without more borrowing authority, the government will run out of cash to pay its bills, with possibly catastrophic effects on financial markets and the economy.
Aware of the tight time frame, White House and top congressional leaders drew up a proposed timeline for getting a debt-limit bill passed by both houses in time.
The timeline calls for the Senate to unveil its bipartisan plan this week and begin considering it Saturday, The Washington Post reported.
The Senate could pass the plan by July 29, giving the House four days to consider whether to approve the plan before Aug. 2, the Post said.
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