Gang of Six, plan hailed as debt-ceiling breakthrough

There might still be a chance to depolarize the political debate over the debt ceiling and deficit reduction.

That's thanks to the Lazarus-like resurgence of the Gang of Six, a bipartisan group of senators who have been working tirelessly to come up with a balanced plan to restore our nation to fiscal responsibility.

Washington's professional partisans and cynical scribes had written the Gang of Six's efforts off in recent weeks as well-intentioned but ineffectual, especially after Sen. Tom Coburn, R-Oklahoma, took a hiatus from their talks.

But Coburn was back on Tuesday at a presentation of their $3.7 trillion deficit reduction plan to 46 of their fellow senators. Even more impressive was the endorsement the outlines of their plans got from the president of the United States.

In an unexpected appearance at a White House press briefing, President Obama praised the Gang of Six plan as being "broadly consistent with the approach that I've urged: 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.

The details of the proposal have yet to be released. But a five-page draft outlines a plan to cut deficits by $3.7 trillion over 10 years. Key elements include:

A new bill that cuts $500 billion in discretionary spending over 10 years, including defense spending.

An immediate freeze of congressional pay and the sale of unused federal property.

New discretionary spending caps through 2015.

A requirement that congressional committees report legislation within six months to find billions in savings in entitlement programs over 10 years.

Creation of a 67-vote threshold to make it more difficult for Congress to exceed its spending caps.

A longer-term overhaul of the tax code, eliminating many tax breaks and using the savings to reduce marginal income tax rates and pay down the deficit.

Elimination of the $1.7 trillion Alternative Minimum Tax and the $298 billion Sustainable Growth Rate formula for Medicare (known as the “doc fix”) – provisions aimed at reducing deficits that Congress has routinely bypassed.

An overhaul of Social Security, but direction of all savings to long-term solvency, not to paying down the debt.

“This is potentially the biggest game changer we’ve had since the debt ceiling discussions began,” says Maya MacGuineas, president of the Committee for a Responsible Federal Budget in Washington.