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Deficit Hawks See Opening

With the super committee’s failure last week, industrious lawmakers are grasping yet again at the opportunity to reach a sweeping deficit reduction deal — but they face the same obstacles that have crushed every group that’s tried.

Still seeing an opportunity in the bleakest of legislative outlooks, the bipartisan “gang of six” met for dinner Monday night in the Capitol office suite of Senate Majority Whip Dick Durbin (D-Ill.) to discuss a post-super-committee Congress. The group has grown to eight — and its members also tout the support of dozens more who attended informal information sessions throughout the summer — but the size of their challenge has not been reduced.

Lawmakers at the dinner suggested that they talked about talking, but they did not decide whether they would try to fill the void left by the failed Joint Committee on Deficit Reduction. And even if the group wanted to rescue the country from ballooning deficits, it never produced legislative language to back its big goal of reaching nearly $4 trillion in deficit reduction by tackling entitlements and tax reform.

If the gang of six wants to be serious, sources suggest, it will need to come up with a real product sometime in the beginning of 2012. So close to the failure of the super committee, however, that seems like a hefty goal.

“I hope that’s not overly optimistic because we’re going to be out of session for some period of time, but I think it’s clear to me that any proposal dealing with the deficit has to be in writing, scored by the CBO and ready for the floor — and the question is whether our group or any group can reach that. Last night, we talked about at least discussing it,” Durbin said when asked whether the gang could create such a product by February or March.

“We’re not starting anew, but we’re starting fresh in light of changing circumstances, both political and economic,” Durbin added.

Besides Durbin, the gang of six includes Sens. Saxby Chambliss (R-Ga.), Mark Warner (D-Va.), Kent Conrad (D-N.D.), Tom Coburn (R-Okla.) and Mike Crapo (R-Idaho). On Monday, those six were joined by Sens. Michael Bennet (D-Colo.) and Mike Johanns (R-Neb.), according to sources.

The biggest incentive for the gang and others in Congress to devise a deficit reduction deal is the $1.2 trillion in automatic cuts that were triggered by the super committee’s demise. Those cuts include nearly $500 billion in across-the-board spending cuts to the Department of Defense — cutbacks Defense Secretary Leon Panetta and some Congressional Republicans have deemed catastrophic.

Sens. John McCain (R-Ariz.) and Lindsey Graham (R-S.C.) began working on legislation to roll back the sequester even before the super committee failed last Monday. They continue that work now, even though the president has said he will veto any repeal that does not replace that amount with more deficit reduction savings.

The trigger of automatic cuts was designed to make both parties squeamish, but given that the cuts will not begin until January 2013, perhaps the discomfort will grow as that date, along with the November elections, draws nearer.

“You think it’s difficult, wait until you hear what’s going to be said about you as a Member of Congress if you destroy the Defense Department because you can’t do the most basic things,” Graham said Tuesday. “The question is: Who should be fired? If the Congress can’t find a way to reduce the deficit by $1.2 trillion over the next decade — which is a drop in the bucket — should the consequence of our failure be destroying the Defense Department? Gutting the military? Firing people in the industrial complex? … Or should we be fired?

“If you wanted to fire anybody because we couldn’t get to $1.2 trillion, I would pick us, not the military,” the South Carolina Republican said, before expressing optimism that some bipartisan group, or even the gang of six, could come up with a solution.

Neither Senate Majority Leader Harry Reid (D-Nev.) nor Minority Leader Mitch McConnell (R-Ky.) has ever been warm to the gang of six. Reid reiterated Tuesday that if the group wanted to contribute, its members would come forward with legislation.

“What I’ve said to my caucus, and I’m saying it to you here, if someone has a proposal about reducing the deficit, the debt, here’s my suggestion: Put it in bill form, in writing, not all these happy statements about what people think can be done,” Reid said, noting that the three GOP members of the group sent him a letter during the super committee debate pledging not to raise taxes. “I say, go get a bill done, get it scored, bring it to me and I’ll take a look at it.”

Multiple Senate leadership aides suggested that if Reid were more publicly encouraging of the gang’s efforts to produce a bill, it might actually help the party’s message. Because the gang’s outline includes tax increases as well as entitlement reforms, a “balanced package” would require sign-off from the group’s Republicans and yet again pin the GOP in the position of having to defend itself or exhibit an openness to tax reform.

But whatever the battle — be it messaging or policy — it will have to wait until next year. Congress’ calendar is packed with expiring provisions, including a bill to keep the government funded, the payroll tax holiday, tax extenders and unemployment insurance.

In the interim, it appears everyone will just keep discussing the potential for future discussions.

“Somebody’s got to be working on plans,” Conrad said.

Steven T. Dennis contributed to this report

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