From the WSJ:
WASHINGTON—A surprise jolt of bipartisan support emerged Tuesday for a $3.7 trillion deficit-reduction plan that had been in development for months, though it was thought to be dead just several weeks ago.
Roughly half of the Senate's 100 members sat through an hour-long briefing on the plan, which was designed by a group of lawmakers known as the "Gang of Six" and would cut spending, overhaul entitlement programs such as Medicare, rework the tax code, and make significant changes to Social Security.
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The plan does not include an increase in the $14.29 trillion federal borrowing limit. But several senators, including Sens. Susan Collins (R., Maine) and John Kerry (D., Mass.), said they hoped it could be considered as part of a package to raise the debt ceiling before Aug. 2, to avoid a government default.
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A key question remains whether the plan might receive any support in the House, where Republicans have strongly resisted any new proposal that could bring in new taxes. The gang's plan would bring in $1 trillion in new tax revenue over 10 years by narrowing several tax breaks. But Mr. Conrad said it would also lower tax rates and end the alternative minimum tax. He said the combination of tax changes would be viewed by budget experts as a $1.5 trillion tax cut.
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The $3.7 trillion deficit-reduction plan would come from roughly 74% spending cuts and 26% new taxes, Mr. Conrad said.
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Central parts of the plan would:
• Impose immediate spending cuts and caps that reduce the deficit by $500 billion over 10 years.
• Make changes to Social Security to make the program solvent over 75 years.
• Direct key congressional committees to find specific levels of deficit-reduction within their areas of jurisdiction. If the committees fail, then a group of senators—five Democrats and five Republicans—will be able to confer and offer their own a deficit-reduction plan as a replacement.
The full article can be found here.
