A bipartisan group of US Senators — known in Washington as the “Gang of Six” — is preparing to unveil their proposal to reduce the nation’s massive deficit soon after Congress returns from its two-week spring recess, the Washington Examiner reports.
This would be the fourth “major” deficit reduction plan proposed by senior government officials (or ex-officials) in the last six months.
The other three are, in chronological order: The National Commission on Fiscal Responsibility and Reform budget plan, the Ryan Roadmap and President Obama’s long-term budget plan.
Each one of these three has its problems. President Obama disowned the first, even though it was his Commission. Rep. Ryan’s is loaded with political nitroglycerin (Medicare), making his GOP colleagues decidedly nervous. President Obama’s is off by a trillion dollars.
The hope is that something agreed to by Gang of Six members Senator Tom Coburn (R-OK) and Senator Kent Conrad (D-ND) will be palatable enough to attract 60 votes in the United States Senate. If 60 Senators support the Gang of Six budget plan, the chances of its passage in the House greatly increase. If it passes the House, President Obama will sign it, just to send some kind of signal to the markets that the US takes its debt obligations seriously.
The support of Senator Coburn is particularly important to making the Gang of Six plan viable. So it was instructive that he went out of his way on Sunday to attack anti-tax pledge guru Grover Norquist on the NBC News program “Meet The Press.” Specifically, Sen. Coburn said:
“Which pledge is most important… the pledge to uphold your oath to the Constitution of the United States or a pledge from a special interest group who claims to speak for all American conservatives when, in fact, they really don’t? The fact is we have enormous urgent problems in front of us that have to be addressed and have to be addressed in a way that will get 60 votes in the Senate… and something that the president will sign.”
“Where’s the compromise that will save our country? This isn’t about politics that is normal.”
That’s known in the trade as “signaling.” It means that Sen. Coburn will endorse tax reform that is not “revenue neutral,” but “revenue positive” (meaning more tax revenue will be collected that would be the case under the current system). That represents significant progress toward some kind of bipartisan deal, believe it or not, since it allows Democrats to say that they “won” that concession. Democrats are not going to “give” on healthcare, pension and discretionary spending cuts unless Republicans take the lead on military spending cuts and “revenue enhancement.”
We’ll see what happens. If the Gang of Six budget reform proposal is unable to attract a filibuster-proof 60 votes in the Senate, then it seems unlikely that any form of “grand bargain” will get done this year. If nothing is done this year, then S&P is almost surely right that nothing will be done for another two years.