A bipartisan group of senators that has been meeting on and off for months to hammer out a budget deficit reduction plan appears to have reunited and gained support on both sides of the aisle for a plan to reduce the budget deficit by $3.7 trillion over 10 years.

The group, known as the Gang of Six, presented its proposals, which include both spending cuts and some tax increases, to a larger group of senators on Tuesday morning and received words of encouragement from the White House. The group includes Sen. Dick Durbin, D-Ill., Kent Conrad, D-N.D., Mark Warner, D-Va., Saxby Chambliss, R-Ga., Mike Crapo, R-Idaho, and Tom Coburn, R-Okla., who had earlier left the group after they reached an impasse over tax increases. However, he was reportedly back with the group on Tuesday. Their plan attracted support from several leading Republicans, including Senators Kay Bailey Hutchison, R-Texas; Lamar Alexander, R-Tenn., and Mike Johanns, R-Neb.

“The good news is that today a group of senators, the Gang of Six, Democrats and Republicans — I guess now Gang of Seven, because one additional Republican senator added on— put forward a proposal that is broadly consistent with the approach that I've urged,” said Obama.  “What it says is we've got to be serious about reducing discretionary spending both in domestic spending and defense; we've got to be serious about tackling health care spending and entitlements in a serious way; and we've got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something.”

However, the legislation is not going to be ready in time to raise the debt limit by August 2 and avert a government default. The plan reportedly includes three separate tax rates, one at 8-12 percent, another at 14-22 percent, and a third at 23-29 percent, according to the Associated Press. The plan would also reduce tax breaks on mortgage deductions, 401(k) plans and IRAs, charitable deductions, child tax credits and other areas. The plan also proposes to close some corporate tax loopholes, lower tax rates for both individuals and businesses, and eliminate the alternative minimum tax. It would also cut $500 billion immediately from the deficit, and give Congress an additional six months to come up with other spending reductions.

Meanwhile, House Republicans have moved ahead with a vote on a “cut, cap, and balance plan” that would require approval of a balanced budget amendment in Congress before the debt limit could be raised. The amendment would require two-thirds supermajorities in both chambers to approve any future tax increases. That measure, however, is not expected to pass the Senate or survive a Presidential veto.

Senate Majority Leader Harry Reid-D-Nev., and Senate Minority Leader Mitch McConnell, R-Ken., are also working on a separate deal that would provide a series of three votes on incremental raises in the debt ceiling tied to spending cuts. That is seen as a contingency plan in case lawmakers fail to reach an agreement.

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