A group of five senators, formerly the Gang of Six, remains at work on a long-term deficit reduction plan and is looking to cut $4.7 trillion over 10 years, which could grow to as much as $6 trillion with an expected bump in economic activity, according to Sen. Saxby Chambliss, R-Ga., a member.
Speaking before the Economic Club of Washington on Wednesday, Chambliss and another group member, Sen. Mark Warner, D-Va., said that despite the departure of Sen. Tom Coburn, R-Okla., over a dispute with Senate Majority Whip Dick Durbin, D-Ill., about Medicare, they continue to meet and work on their plan, which is based on recommendations made by President Obama’s deficit commission.
The $4.7 trillion in deficit savings is more than what the commission proposed, cutting just over $4 trillion over nine years.
“We don’t really have a final plan, so it’s difficult to say what the number is, but as we have looked at our numbers over the course of our discussions, it did appear that if we go to 10 years, we can be significantly above where the deficit commission report came down and I would hope we can,” Chambliss said after his speech. “With economic growth, we would hope the economy would be stimulated to the point where we even exceed that.”
Chambliss and Warner said the group has no timetable for unveiling its plan, despite the August 2 deadline when the Treasury Department says it will have exhausted its borrowing authority.
On Wednesday, Fitch Ratings also warned that the U.S. credit rating would be threatened if Congress fails to raise the debt ceiling before then.
A bipartisan group of six lawmakers led by Vice President Joe Biden is also at work on a framework for a proposal to reduce the debt, which will be needed in order to win enough votes in Congress to pass legislation that would raise the debt ceiling. The Biden group meets Thursday and members have said they are shooting for July to reach an agreement.
The two senators said they see the two groups complementing one another, with the gang focused on a long-term solution.
“We don’t think there is conflict” with the Biden group, Warner said, adding there is a chance for collaboration.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said she believes there is not enough time for the Biden group to work out a comprehensive plan before the debt ceiling needs to be raised.
She believes the Gang of Six is where the serious deficit reduction plan will emerge. The Biden group essentially needs to find cuts that equal the amount of the increase in the debt ceiling, though Democrats want tax increases to be part of any deficit reduction calculus—something Republicans oppose.
Senate Minority Whip Jon Kyl, R-Ariz., said this week that to get through 2012, the debt ceiling would need to be raised by $2.4 trillion, which would require at least $2.5 trillion in cuts for the GOP to go along.
MacGuineas said she worries that tough decisions on cutting entitlements or changing Medicare or Social Security will be deferred until after the election.
“There will be such a strong temptation to push that after the election, if you don’t have a big vehicle like the gang that is really committed to a comprehensive package that looks at all parts of the budget and puts it on a reasonable time line to put it in place as quickly as possible,” she said.
This article appears in the June 9, 2011 edition of NJ Daily.