CQ TODAY ONLINE NEWS
May 17, 2011 – 10:05 p.m.
Debt Differences Sink ‘Gang of Six’
By Joseph J. Schatz and Paul M. Krawzak, CQ Staff
With lawmakers facing an August deadline to raise the $14.3 trillion debt ceiling, members of both parties want to put deficit reduction measures in place before they vote on raising the cap. The Gang of Six had been working to find a solution, but those negotiations have run aground, at least for now, over entitlement spending.
Many Republicans say huge mandatory programs — including Medicare, Social Security and Medicaid — must be pared to balance the nation’s books. Democrats have pushed back, saying such cuts would hurt the elderly and the poor. They want GOP lawmakers to agree to some tax increases to help reduce the deficit.
The implicit bargain being considered by the group would have forced Republicans to swallow tax increases while requiring Democrats to accept entitlement changes.
Coburn, an Oklahoma Republican, wanted the gang’s proposal to incorporate entitlement spending reductions, including immediate cuts for current Medicare beneficiaries, according to one source.
The focus now turns to talks being led by the White House, although entitlements are sure to be a sticking point in those discussions as well.
Democrats have in the past fiercely defended the safety-net programs, and they would be likely bolster those defenses in an election year, considering that Medicare and Social Security continue to enjoy widespread public support. Taxes are similarly verboten for Republicans.
‘It’s Got to Be Six of Us’
Georgia Republican
“I regret that [Coburn] decided it’s time for him to pull out, but we won’t operate as five of us, it’s got to be six of us,” Chambliss said.
Idaho Republican
That’s not to say the Senate group is giving up its work entirely, and Coburn left open the possibility that he would return to negotiations in the future.
“We’ll continue to get together because there’s still ideas, but it’s not going to be a proposal by five of us,” Chambliss said. “It’s got to be by the six of us.”
Debt Differences Sink ‘Gang of Six’
Coburn’s departure puts the debt reduction spotlight squarely on negotiations brokered by Vice President
Treasury Secretary
Finance Chairman
“We’ve got to find a solution,” Baucus said. “This has great potential. It’s bipartisan, and it’s leadership — Democratic president in the room, essentially, with Republican House leadership in the room, essentially, and the rest of us trying to find a solution. I’m encouraged.”
Time Remaining
There may still be time for the Gang of Six to weigh in, particularly if the debt debate turns into a series of short-term debt limit increases, as predicted by some Republicans. “My guess is that Congress probably couldn’t consider anything more than $1 trillion, which means there will be multiple debt limit votes,” said Sen.
Baucus said that he would not want to see an incremental approach. The Biden group appears to be trying to force a compromise on a debt reduction “down payment” that would satisfy all sides.
“I think the better solution is to get this behind us, that is, an agreement with sufficient down payment to allow a longer extension,” Baucus said. “Probably best if all the way to 2013.”
Yet many lawmakers had been holding out hope that the Gang of Six — which also includes Democrats
Part of the group’s perceived clout stemmed from Coburn’s reputation as an anti-spending, anti-tax conservative. Any bipartisan plan that Coburn could support, the thinking went, would have an easier time making its way through Congress.
Coburn called it quits Tuesday after expressing pessimism over the prospects of reaching a bipartisan deficit reduction agreement.
“He is disappointed the group has not been able to bridge the gap between what needs to happen and what senators will support,” spokesman John Hart said. “He has decided to take a break from the talks.”
Asked if Coburn’s withdrawal was permanent, Hart said not necessarily. “He’s taking a break,” Hart said. Rejoining the talks is “always possible.”
Debt Differences Sink ‘Gang of Six’
Durbin plans to attend the next scheduled meeting of the gang, which is slated for Wednesday, despite Coburn’s withdrawal, a spokesman said.
The group was considering a plan for equally shared budgetary pain that would overhaul the tax code, including the elimination of many tax breaks, while also putting entitlement spending on the chopping block. Even as Coburn faces pressure to refuse tax breaks, Democrats in the group have been under pressure from their own base not to agree to cuts to Social Security, Medicare and Medicaid.
Chambliss acknowledged that the lawmakers were struggling to reach an agreement on some of the most contentious points, particularly taxes and entitlements.
“When you get down to the few issues that are really the game chargers, that’s when it gets tough, and that’s where we are,” Chambliss said. “There’s a good discussion ongoing, but let me just say we’re not there.”
Coburn had faced heavy pressure from anti-tax activist Grover Norquist, president of Americans for Tax Reform, not to support any kind of revenue increases.
Earlier this year, Norquist wrote on National Review Online that “Sen. Coburn has been pushing a $1 trillion tax hike from [the Obama] commission proposal he helped write. . . . And it requires that you trust Democratic Sen. Dick Durbin to actually deliver spending restraint.”
The gang came together last December after Chambliss and Warner began working on legislation to implement the recommendations of the president’s bipartisan fiscal commission.
Chambliss said the Biden group appears to be focused on a short-term debt limit solution, and he cast his own group’s efforts as focused on a long-term deal.
“What they’re talking about is more short-term. We’re more long-term,” he said. “We focus more on the long-term, and while we do have some short-term considerations in there, ours truly is more focused on $4 trillion and not raising the debt ceiling.”
Brian Friel and Niels Lesniewski contributed to this story.