The so-called “Gang of Six,” a bipartisan group of Senators who had been meeting to craft a plan to reduce the nation’s deficit until disbanding a few months ago, has resurfaced in a big way. Today they asserted themselves into the debt ceiling debate by unveiling a $3.7 trillion deficit reduction plan. In May, one of the Gang’s members, Senate Tom Coburn (R-OK), left the group after a dispute with Democratic members about spending levels and began crafting his own proposal. Many pronounced the Gang dead at that point, but the other five members continued to work to find common ground. Now Coburn has returned and the first major deficit reduction plan endorsed by members of both parties has been released. President Obama today praised the work of the Gang and noted their plan’s “potential for bipartisan consensus.”
The plan centers around a two-step legislative process involving an initial $500 billion in spending cuts followed by a more ambitious and comprehensive proposal including tax reforms, spending caps, entitlement reforms, and further discretionary spending cuts assigned by committee. It roughly follows the revenue and discretionary and mandatory spending cut targets established by the National Commission on Fiscal Responsibility and Reform. One major concern with the plan is that it sets savings levels and targets but in many cases is ambiguous about how they will be achieved. For instance, it assumes hundreds of billions of dollars in savings from health care but leaves the specifics of how the savings is achieved to the Congressional committees of jurisdiction, making it difficult to assess the plan’s impact on Medicaid. The same holds true for much of the savings the plan aims to generate through discretionary funding cuts.
In addition to President Obama’s supportive comments, Senator Lamar Alexander (R-TN), the third-ranking Republican in the Senate, reportedly told colleagues he would support the plan as well. That said, whether the plan can pass the full Senate–let alone the potentially more hostile House–is unclear at this point. Still, its release at the 11th hour of the debt ceiling debate is sure to influence the ongoing negotiations.