This morning, a bipartisan group of 50 or more senators endorsed a revived version of the “Gang of Six” plan. The Atlanta Constitution’s Jamie Dupree seems to be the first to put the details on the web here. President Obama endorsed the plan in principle in a press room appearance at 1:35 p.m. today. The transcript will be posted here. This stole the thunder from the House’s vote later today for “Cut, Cap, and Balance,” H.R.2560. When the Senate votes down H.R.2560 later this week, the key question will be whether 120 House Republicans will support the “Gang of Six” plan. I’ve already had one top House GOP staff director express doubt, but we shall see. If Senator McConnell’s (R-KY) proposal is added, giving the President the authority to raise the debt limit in increments of $700 billion, $900 billion, and $900 billion, subject to a disapproval resolution from Congress, we will have a way out of the implacable positions on the debt limit.
The good news here is that Washington will avert default before August 2 and may actually cut some spending and pledge to undertake politically tortuous entitlement and tax reforms that are long overdue and desperately needed to revive our economy.
The bad news is that the plan mostly kicks the can down the road.
The ugly will be seen when CBO actually scores these savings and finds them less than the $3.6 trillion promised. That doesn’t bother me very much. I’ve always said, deficit reduction of this magnitude is never achieved in one step. It will take repeated legislation over the next decade to tackle our unprecedented deficits.