A couple of months ago, the Senate's bipartisan "Gang of Six" that was formed to broker a passable deficit-reduction deal broke apart, after some members realized that six senators cannot simply craft their own deal in private and expect everyone in Congress to pass it. But as of today, the Gang has reformed, with President Obama's blessing! And they have a plan, which still may or may not pass the House of Representatives.
The Gang of Six 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 that 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.
The tax reform outline would set up three income tax rates: a bottom rate of 8-12 percent; a middle rate of 14-22 percent and top rate of 23-29 percent to replace the current system that has a bottom rate of 10 percent, with five additional rates topping out at 35 percent. It would reduce but not eliminate tax breaks on mortgage interest, higher-cost health plans, charitable deductions, retirement savings and tax credits for families with children.
President Obama made it clear during a brief speech to the press corps today that he wants to follow this framework, and Senators from both parties seem to like it. So now we have the President and the upper chamber of Congress staring down the naughty children in our House of Representatives with scary, paternalistic glares. Don't cross the Gang of Six! Otherwise... you know... six people will not be happy with you!
[Image of Gang of Six Sens. Saxby Chambliss (left) and Mark Warner (right) via AP]