'Gang of Six' Senators propose debt compromise
U.S. President Barack Obama holds a news conference at the Brady Press Briefing Room at the White House.
JEREMY HOBSON: Well now to Washington where there are 13 days left for Congress to raise the debt ceiling and avoid a U.S. default. And now a grand compromise is back on the table. A bipartisan group of Senators called the "Gang of Six" has unveiled a package that would cut the deficit by $3.7 trillion over 10 years. But as Marketplace's Washington Bureau Chief John Dimsdale reports the proposal may be a little too much and a little too late.
JOHN DIMSDALE: The "Gang of Six" deal is a complicated mix of spending cuts, tax changes and reforms of entitlement programs from Social Security to Medicare. While it does have some bipartisan support, in the Senate at least, getting the package through both the House and Senate before the time runs out is virtually impossible, according to budget expert Stanley Collender at Qorvis Communications.
STANLEY COLLENDER: It's too comprehensive. There are too many controversial pieces. And as a result, chances are it can't be done by August 2nd.
Collender doesn't see any solution to the debt ceiling impasse yet -- given Democrats' insistence on some tax revenues to balance the books -- and Republicans' objections to new taxes. Polls show Americans now support a package of some taxes and some spending cuts. The question is, can something politically palatable be put together in time.
In Washington, I'm John Dimsdale for Marketplace.
JEREMY HOBSON: Congress has 13 days left to raise the debt ceiling or the U.S. government starts defaulting on its debt. And now there's word that a grand compromise is back on the table in Washington. A package that wouldn't just raise the debt ceiling, but would also take a bite out of the nation's public debt. It comes from a bipartisan group of senators known as the gang of six. And our Washington Bureau Chief John Dimsdale is here live with the details.
HOBSON: Good morning, John.
JOHN DIMSDALE: Hey Jeremy.
HOBSON: So What's in the plan?
DIMSDALE: Well the key part for the White House and Democrats is that the deal achieves bipartisan support for bringing down some of the deficit through tax revenues and not all spending cuts and in fact in this package, over a quarter of the $3.7-trillion dollars in deficit reduction over 10 years in this package comes from tax changes that bring in new revenue. Yesterday President Obama gave it his seal of approval, essentially because it meets his requirement that the solution be balanced.
PRESIDENT OBAMA: It would not match perfectly with some of the approaches that we've taken, but I think that we're in the same playing field.
HOBSON: But John we're in the same playing field with less than two weeks from the deadline is there time to pass something.
DIMSDALE: Not this package, they've come too close to the August 2nd debt ceiling to put a complicated deal into legislative language and get it through both the Senate and the House. Especially the House where the crafting of the details will be the most delicate. So to go for a grand compromise means there would have to be some kind of short-term extension on the debt ceiling that would give Congress more time and that's pretty doubtful. But there is a Plan B from Senate leaders who propose doing the minimum necessary to extend the debt ceiling through the next election.
HOBSON: Keeping everyone guessing, Marketplace's John Dimsdale in Washington, thanks.