Debt ceiling debate: Gang of Six plan to reduce deficits
The bipartisan "Gang of Six" senators on Tuesday offered a major plan (PDF) to cut the deficit by almost $4 trillion over the coming decade, but whether it can break through the budget debate will depend on whether Republican lawmakers can find a way to endorse more than $1 trillion in new tax revenues reaped as Congress overhauls the loophole-choked U.S. tax code.
Their plan calls for an immediate $500 billion "down payment" on cutting the deficit as the starting point toward cuts of more than $4 trillion over the coming decade that would be finalized in a second piece of legislation. Most of those savings would come from four years of caps imposed on the day-to-day budgets of Cabinet agencies set by the annual appropriations bills.
It would also curb the growth of Social Security benefits by moving to a lower inflation adjustment for annual cost-of-living updates. Depending on how one keeps score, the measure would save between $3.7 trillion and $4.7 trillion over the coming decade.
President Barack Obama, in video below, lauded the deficit-reduction plan and said he hoped congressional leaders would "start talking turkey" as soon as Wednesday along the lines of the "Gang of Six" proposal.