U.S. budget panel to look at ‘Gang of Six’ savings
By Richard CowanWASHINGTON, Oct 18 (Reuters) - A sweeping, bipartisan plan
developed earlier this year to cut $3.7 trillion from U.S.
deficits will be discussed on Wednesday by the special
congressional deficit-reduction panel, aides said on Tuesday.The wide-ranging deficit-reduction plan was crafted in the
U.S. Senate by the so-called “Gang of Six” several months ago.It called for tackling U.S. government budget deficits on
three main fronts: reducing security and non-security
discretionary spending; imposing some reforms on the costly
Medicare healthcare program for the elderly; and reforming the
U.S. tax code to capture at least $1 trillion in additional
revenues.Gang of Six members “are coming in to have a discussion”
with the “super committee” on deficit-reduction that is trying
to find at least $1.2 trillion in savings over the next 10
years, a committee aide told Reuters.The Gang of Six — three Democratic and three Republican
members of the Senate — got a lot of attention earlier this
year when it unveiled the outline of a plan to cut U.S.
deficits by around $3.7 trillion over 10 years.At the time, it was the only bipartisan deficit-reduction
plan composed in a bitterly divided Congress. A significant
part of its work was based on the findings in December of a
presidential deficit-reduction commission that called for about
$4 trillion in government savings over a decade with a mix of
spending cuts and revenue increases.But a contentious fight in the summer between Democratic
President Barack Obama and congressional Republicans over
increasing U.S. borrowing authority stopped the Gang of Six
dead in its tracks.SECOND LOOKNow, as the super committee races against a Nov. 23
deadline for a majority of the 12-member panel to find at least
$1.2 trillion in savings — on top of the $917 billion enacted
in early August — the Gang of Six ideas are getting a second
look.It was not clear whether the super committee was interested
in particular elements of the Gang of Six plan or whether it
wanted to “go big,” as some members of Congress have been
urging, by crafting a deficit-reduction plan that exceeds its
$1.2 trillion minimum.A larger budget-cutting plan would hearten Wall Street and
credit rating agencies. In August, Standard and Poor’s cut the
U.S. AAA credit rating one notch amid chaos in Washington over
budgets and the government debt limit.The super committee has been meeting in secret and some
budget watchers in the private sector have speculated that it
was having a difficult time coming up with even the $1.2
trillion.Since the summer, the Gang of Six has grown to around 40
senators from both political parties who have endorsed its
goals, according to one Senate aide.That represents a significant portion of the 100-member
Senate, where a simple majority will be needed by the end of
this year to pass any super committee plan.Among the major elements of the Gang of Six program are:
Spending caps on discretionary government programs through
2015, changing the measure of inflation to slow the growth of
Social Security benefits and cutting Medicare costs while
maintaining “the essential healthcare services that the poor
and elderly rely upon,” according to a summary.On taxes, the Gang of Six called for simplifying the tax
code by reducing the number of special tax breaks and by
setting three brackets with income tax rates of 8-12 percent,
14-22 percent and 23-29 percent.The Gang of Six also called for repealing the Alternative
Minimum Tax that initially was aimed at the wealthiest but
increasingly threatens to hit middle-class taxpayers.Corporate tax rates would be 23-29 percent, down from the
current 35 percent.
