President Obama: Gang of Six Deficit Reduction Plan is ‘Good News’

With the United States just two weeks away from defaulting on its debt unless a deal is reached to raise the debt limit, a bipartisan group of senators presented a possible new way forward Tuesday when they introduced a new debt reduction plan that would save $3.7 trillion from the deficit.

President Obama and senators from both parties reacted positively to the plan, which would also raise $1.2 trillion in revenue, cut federal spending and shore up Social Security for 75 years. But there is likely not enough time for the framework to become law before the Aug. 2 deadline.

You can read details of the plan here.

The Gang of Six includes Senate Majority Whip Dick Durbin, D-Ill., Sen. Kent Conrad, D-N.D., Sen. Mark Warner, R-Va., Sen. Saxby Chambliss, R-Ga., Sen. Tom Coburn, R-Okla. and Sen. Mike Crapo, R-Idaho. The group had been on hiatus after Coburn left the group in May, but he returned Tuesday to help unveil the agreement to a group of senators.

“I think there is a real desire among many, Republicans and Democrats, to have a plan that really does change the trajectory of our debt,” Sen. Conrad said Tuesday. “We did this as an effort to reduce the debt. This was not part of a debt extension plan…could the two get married? Could they get combined at some point? I’m sure that’s possible. At this moment I don’t have a plan to do so.”

Senate Majority Leader Harry Reid, D-Nev., told reporters Tuesday afternoon that the work done by the bipartisan group has been extraordinary, but he did not explicitly endorse the framework. He added that little time remains to transform the framework into legislative language and get it passed in both chambers of Congress before the Aug. 2 deadline, meaning any Gang of Six legislation would likely have to wait until after the debt ceiling issue has been resolved.

“I’m happy to work and use anything in the Gang of Six that we can. But remember we only have 13 days, 13 days. And there are a number of senators who said they’ll do everything that they can to stop the debt ceiling from being increased, in fact allow us to default on our debt,” Reid said, alluding to threats of a possible filibuster from Republican Senators, which could delay passage of any debt limit increase legislation.

Reid added that he has asked Sen. Warner to report back to him in 24 hours on what elements of the Gang of Six framework might be incorporated into a possible debt limit deal. Reid is working with Senate Minority Leader Mitch McConnell, R-Ky., on a plan that would give President Obama the authority to raise the debt limit but give Congress the chance to express its disapproval of the increase. So far, that Reid/McConnell plan (the details of which are not yet available) appears to be the only viable method for increasing the debt limit before the deadline.

Photo of Sen. Tom Coburn by Chip Somodevilla/Getty Images.