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‘Gang of Six’ May Be Too Late

Updated: 10:07 p.m.

Support surged in both parties Tuesday for a $3.7 trillion deficit reduction outline proposed by the “gang of six,” but leaders warned that it might have come too late to have much effect before the Aug. 2 deadline to raise the debt ceiling.

The euphoria in the Senate was not matched in the House, where leaders and the rank and file remained laser-focused on their veto-bait Cut, Cap and Balance legislation that would condition a debt ceiling increase on passage of a controversial balanced budget constitutional amendment. The House passed that measure Tuesday evening on a largely party-line vote of 234 to 190.

The apparent breakthrough by the gang — which included surprise backing from Sen. Tom Coburn (R-Okla.), encouragement from President Barack Obama and support from members of Senate Republican and Democratic leadership — came after a meeting with about 50 Senators on Tuesday morning during which the gang laid out its framework.

“I think we should put everything aside, put it in legislative language and tie it to the debt ceiling,” Sen. Roger Wicker (R-Miss.) said. “This is a monumental achievement of statesmanship.”

But while rank-and-file Senators in both parties appeared overjoyed at the bipartisan breakthrough after months of stalemate and urged quick action, leaders poured cold water on the idea.

“It’s not ready for prime time,” said Majority Whip Dick Durbin, a member of the gang. The Illinois Democrat said the framework is not yet in legislative form and that it also hasn’t been scored by the Congressional Budget Office, and he added there is no way to do so by Aug. 2.

Majority Leader Harry Reid (D-Nev.) also noted the short amount of time left.

“We only have 13 days — 13 days — and there’s a number of Senators who said they’ll do everything they can to stop the debt ceiling from being increased,” Reid told reporters after the Democrats’ weekly Conference luncheon.

Reid has been working with Minority Leader Mitch McConnell (R-Ky.) on a Plan B — which is still seen as the most likely vehicle for averting a potentially catastrophic debt default.

McConnell said Tuesday that he hadn’t yet decided whether he supports the gang’s plan, but he applauded its goal of doing something significant on the debt.

The Reid-McConnell fallback plan would pair McConnell’s plan to let the president raise the debt ceiling by $2.5 trillion in installments with some upfront cuts and a joint committee empowered to send a deficit reduction package to the House and Senate floors for a vote.

The group’s supporters said there could be a way to add at least pieces of the outline to that package. Reid said gang of six member Sen. Mark Warner (D-Va.) will report back to him within the next 24 hours on any provisions that might be able to fit into the Plan B package.

Obama, meanwhile, stopped short of an outright endorsement.

The president praised the group’s plan because, he said, it shows Republicans and Democrats can agree on tough spending cuts and increased revenues. He said it would not “match perfectly” with the direction he has been heading but that he and the group are “on the same playing field.”

Reid said Tuesday that he expected to hold another negotiating session with House and Senate leaders at the White House on Wednesday. Top Obama advisers also will meet with faith leaders Wednesday to discuss the deficit, Roll Call has learned.

The president also said he still supports the McConnell-Reid fallback plan. “We have to have that fail-safe,” he said.

Others explicitly backing the group included Republican Conference Chairman Lamar Alexander (Tenn.) and Health, Education, Labor and Pensions ranking member Mike Enzi (R-Wyo.), as well as rank-and-file Members in both parties.

But Senate GOP support, or even backing from the president — whom McConnell said needed to be onboard months ago for the plan to be legitimate — does not change the reality of a tea-party-influenced House.

House Republicans so far have been unwilling to consider increased revenues of any kind, let alone the $1 trillion envisioned by the gang.

A spokesman for Speaker John Boehner (R-Ohio) issued a cautious statement.

“This plan shares many similarities with the framework the Speaker discussed with the president, but also appears to fall short in some important areas,” the spokesman said.

House Majority Leader Eric Cantor agreed, saying in a statement Tuesday evening that the plan includes some provisions already under discussion with the president but that he is concerned about its revenue target, among other things.

“We’ve begun reviewing the Gang of Six proposal and while there are still portions that are unclear and need more detail, this bipartisan plan does seem to include some constructive ideas to deal with our debt,” the Virginia Republican said.

A GOP aide said House Republicans are pushing for larger structural changes to Medicare and Medicaid and less revenue than the gang’s plan calls for, among other differences.

Rep. Kevin Brady (R-Texas) was not upbeat about the group’s chance.

“Tax increases aren’t going to fly in the House, and I don’t believe that is going to change,” Brady said.

But Rep. Steven LaTourette (R-Ohio), who is close to Boehner, said he was hopeful that the gang’s plan could revive a grand bargain.

“I’ve seen that the president is excited about it,” LaTourette said. “If he’s excited, I am excited.”

LaTourette said he was fine with new revenue in the plan because it would reduce rates. “What they’re talking about is … simplifying the tax code, closing loopholes. There are some that are going to argue that those are tax increases. I don’t buy into that. … The grand bargain is still there, the president and the Speaker are working on it, and I believe we will have a grand bargain sometime next week.”

The group’s plan would cap income tax rates at no more than 29 percent, and the middle class would be permanently exempted from the alternative minimum tax. But net revenue would increase by shrinking deductions and tax loopholes.

The group had appeared all but left for dead after Coburn left it earlier this year and talks stalled. But his return — and the hunger of Senators for a serious effort at reaching a big deal — revived it.

Coburn said it looks as if about 60 Senators are likely to back it.

Besides Coburn, Durbin and Warner, Senate Budget Chairman Kent Conrad (D-N.D.), Sen. Mike Crapo (R-Idaho) and Sen. Saxby Chambliss (R-Ga.) are original members of the gang of six.

Chambliss said the group has basically agreed to the package, with the exception of a few small details. He said he wants to brief House lawmakers in hopes of enlisting their support. Chambliss is a close friend of Boehner’s.

Several Senators from both parties spoke positively of the plan to reporters after the meeting.

Sen. Chris Coons (D-Del.) strongly backed it.

“This is the sort of big, balanced and bipartisan package that we need to move the country forward,” Coons said.

He added, “If Sen. Durbin and Dr. Coburn can both endorse it, this may be just the tough discipline fiscally and the balanced path forward that we need.”

The group’s plan includes an upfront down payment reducing the deficit by $500 billion and requires nine Senate committees to produce legislation implementing the rest of the deal within six months, according to an outline obtained by Roll Call.

The plan also creates strict new spending caps that would require a 67-vote supermajority in the Senate to breach and shrink annual deficits to less than 2 percent of the gross domestic product from about 10 percent this year.

And the plan tackles Social Security, calling for reform that would ensure the program’s solvency for 75 years and plow any savings back into the program. It would be handled on a separate legislative track, but the overall package would not move forward without it. Of note, the plan includes several enforcement mechanisms that would force spending cuts if committees fail to produce legislation.

Meredith Shiner, Humberto Sanchez and Ambreen Ali contributed to this report.

Editor’s Note:

This article updates the print version to include comments from House Majority Leader Eric Cantor and the results of the Tuesday evening House vote on the Cut, Cap and Balance measure.

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