Washington - A bipartisan group of US senators on Tuesday
revived an ambitious budget plan that could provide new ideas for
breaking the impasse in Congress over raising the nation's credit limit
by August 2.
President Barack Obama threw his support behind the
proposal by the "Gang of Six" senators, saying it was broadly consistent
with his approach on reducing debt and deficits.
Obama urged
Senate Majority Leader Harry Reid, a fellow Democrat, and Senate
Republican leader Mitch McConnell to start "talking turkey" about it.
Senate Budget Committee chairperson Kent Conrad, one of the six Democratic
and Republican senators who have been working since December on a
deficit-reduction plan, said the proposed $3.75 trillion in savings over
10 years contains $1.2 trillion in new revenues.
The group briefed about half of the 100-member Senate and "the response was very favourable," Conrad told reporters.
He said the group asked fellow senators to take 24 hours to look at the proposal and "report back to us".
According to an executive summary of the plan, it would immediately
impose $500bn in deficit cuts, cut security and non-security
spending over 10 years with spending caps, make the Medicare and
Medicaid healthcare programmes operate more efficiently and abolish the
Alternative Minimum Tax.
Asked whether the plan could become part
of urgent negotiations that link deficit reduction to raising the US
government's borrowing authority by August 2, Conrad said: "Could the two
get married? Could they get combined at some point? I'm sure that's
possible."
But leaders must first find out whether the proposal has enough support in the Senate, he said.
But a senior Senate Democratic aide said, for now, "there are no
discussions" on incorporating Gang of Six ideas into legislation to
raise the debt limit beyond $14.3 trillion.
Tax issue
Conrad was quick to say that while there are $1.2 trillion in new
revenues, the overall plan envisions a $1.5 trillion tax cut that would
be achieved through broad tax reforms.
Most Republicans, especially Tea Party members in the House of Representatives, have vowed to block any revenue increases.
The Senate group's hope has been that if the three conservative
Republican members embrace revenue increases, the idea could catch fire
among other Republicans in the Senate and House - especially if popular
but expensive entitlement programs such as Medicare also shoulder some
cuts.
In another politically risky move, the Gang of Six plan
would achieve significant savings in healthcare programs, Conrad said.
The specific spending cuts would be decided later by congressional
committees.
Conrad said a separate measure would reform the
Social Security retirement program to stabilise its finances for the
next 75 years.
The effort got a boost as conservative Republican
Senator Tom Coburn rejoined the group after taking a "sabbatical" in
mid-May amid heavy disagreement over Medicare spending cuts. It was not
yet clear how Coburn's concerns have since been addressed.
On
Monday, Coburn unveiled his own plan to cut $9 trillion in deficits over
a decade, including nearly $1 trillion in revenue increases.
Revenue proposals are not likely to include income tax rate increases.
Instead, they could focus on repealing or rolling back special tax
favors such as those for ethanol blenders and companies that operate
corporate jets, as well as preferential tax treatment for fund managers.
Those specific decisions likely would be up to House and Senate
tax-writing committees, along with broader tax reform questions.