Obama, Lawmakers Laud Federal Debt Reduction Strategy

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President Obama and lawmakers in both parties are openly expressing their support of a new strategy for reducing the federal debt unveiled Tuesday, deeming the emerging plan to save $3.7 trillion over the next decade a viable means of helping to break a political impasse over the debt limit and avert a U.S. default.

Developed by a bipartisan group of senators known as the "Gang of Six," the plan calls for $500 billion in immediate savings and requires lawmakers in the coming months to cut agency spending, overhaul Social Security and Medicare, and rewrite the tax code to generate $1 trillion in fresh revenue. Its framework relies heavily on the work of Obama's 18-member fiscal commission, calling for deep cuts at government agencies, including the Pentagon; significant reductions to Medicare and Medicaid, and a plan to make Social Security solvent.

The plan also calls for raising at least $1 trillion over the next decade by reducing a variety of tax breaks and deductions, among them breaks for employer-provided health care. While some of the savings would be dedicated to debt reduction, the remainder would be earmarked for lowering tax rates for Americans across the board, with top individual and corporate rates decreasing from 35% to 29% or less.

"It's time to get down to the business of actually solving this problem," Obama told reporters at a White House briefing Tuesday. He subsequently summoned congressional leaders to the White House to "start talking turkey" about a compromise package that could pass by August 2.

Senator Tom Coburn (R-OK), a leader in the GOP on budget issues, backed the plan as well after dropping out of the "Gang of Six" in mid-May, while Senate Budget Committee Chairman Kent Conrad, (D-ND), a Gang of Six member, says Senate leaders were investigating ways to add Gang of Six goals to legislation already in development to raise the debt ceiling. House Speaker John Boehner (R-OH) issued a statement that the Gang of Six plan "shares many similarities with" the far-reaching strategy he had been pursuing with Obama this month but had abandoned amid GOP opposition to fresh revenue.

Pundits deem time a major impediment to pursuing the Gang of Six strategy, as it has not yet been drafted in legislative form or examined by congressional budget analysts. Opponents sharply criticized sketchy details of the plan distributed during a morning briefing attended by about half the Senate earlier this week, arguing that printed summaries identify nowhere near $3.7 trillion in savings.

In addition to Senator Conrad, Democratic members of the Gang of Six are Senators Mark Warner of Virginia and Dick Durbin of Illinois. The three Republicans members are Senators Mike Crapo of Idaho, Tom Coburn of Oklahoma, and Saxby Chambliss of Georgia.T

To read an Executive Summary of the plan, click here: http://www.washingtonpost.com/r/2010-2019/WashingtonPost/2011/07/19/Nati....