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July 19, 2011 12:40 PM Reconstituted Gang of Six causes a stir

By Steve Benen

Remember the Gang of Six? Well, apparently they’re back, and they’re generating quite a bit of attention this morning with their nearly-finalized debt-reduction plan.

Democratic and Republican senators are rallying behind a $3.7 trillion deficit reduction plan unveiled Tuesday morning by the five remaining members of the Gang of Six.

Sen. Tom Coburn (R-Okla.), who pulled out of the Gang of Six in May, has rejoined the group and praised the plan as something that could win the 60 votes needed to pass the Senate.

I have not yet seen any of the details, but the plan would reportedly produce $3.7 trillion in savings over the next decade, including $1 trillion in new revenue by scrapping a series of tax breaks and tax expenditures.

Wouldn’t the new revenue necessarily mean knee-jerk GOP opposition in the House? The Gang’s members think they know a way around this.

Coburn … noted the Congressional Budget Office would score the plan as a $1.5 trillion tax cut because it would eliminate the Alternative Minimum Tax. It would generate a significant amount of revenue out of tax reform and reduction of tax rates, which authors believe would spur economic growth.

Without additional information, I haven’t the foggiest idea what could make $1 trillion in revenue look like a $1.5 trillion tax cut. It’s also unclear the extent to which the Gang tackles entitlements. I assume the details will be forthcoming soon enough, and I’ll flesh this out after I get a closer look.

In the meantime, all kinds of senators seem awfully excited about this. The Gang held a briefing this morning, presenting the plan to about 50 senators, and won some positive reviews. Just relying on media accounts, Texas’ Kay Bailey Hutchison (R), Nebraska’s Mike Johanns (R), Colorado’s Michel Bennet (D), Ohio’s Rob Portman (R), and Delaware’s Chris Coons (D) all came away impressed, and said so on the record.

So, now what? That’s unclear, too. It’s hard to imagine how this plan — the details of which are still being ironed out — could possibly be factored into the debt-ceiling talks. Regardless of merit (or lack thereof), there’s just not enough time.

And then there’s the House, which continues to believe even a penny of additional revenue is an assault on all that is good and holy. Republicans in the lower chamber are likely to care less about how the CBO would score the plan, and care more about giving Democrats the revenue they’re seeking in the compromise.

It’s nice, I suppose, to see a bipartisan group of senators getting along and working together in a reasonably productive way, but (a) the plan is still likely to be pretty bad; (b) it’s a month too late to resolve the current crisis; and (c) House passage appears to be a fantasy.

Other than that, the Gang of Six is in great shape.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • K in VA on July 19, 2011 12:47 PM:

    Uh, the AMT is one of these things that helps poor people. So, one way or another, we're still talking about screw-the-poor to enrich-the-rich?

  • CDW on July 19, 2011 12:50 PM:

    It�s nice, I suppose, to see a bipartisan group of senators getting along

    Anything that coburn agrees to bodes ill for the rest of us.

  • DAY on July 19, 2011 12:51 PM:

    No matter what congress does, our famed Middle Class will be screwed.

    As to the infinite methods of the screwing, one needs only consult the Kama Sutra.

  • CDW on July 19, 2011 12:52 PM:

    P.S. Bennet is a cat food commission supporter, so that tells you what probably gets him excited.

  • hank on July 19, 2011 12:58 PM:

    I found a computer model for what they're doing, I think:

    http://www.maniacworld.com/shell_game.html

  • Camus on July 19, 2011 1:00 PM:

    Since there aren't enough details I'll avoid comment on this new "compromise" deal. I do have a question which is probably naive. Aren't there enough semi-sane Republicans in the House to join with Dems to obtain a majority to pass a debt limit increase even over the outraged objections of the tea party nuts? Is the problem that Boehner won't allow something like that to come to a vote?

  • PQuincy on July 19, 2011 1:01 PM:

    The AMT, for all of its flaws, is one of the few elements keeping the Federal tax code progressive. Eliminating it should thus be coupled with a restoration of reasonable marginal rates, and with the elimination of many deductions favored by high-income taxpayers, not with lower rates.

    That said: I'm all for eliminating the AMT, capping the mortgage interest deduction, phasing out the corporate tax deduction for health care, and otherwise simplifying the tax code. But it should be done in a way that restores tax yields in a way that helps lead to a more balanced budget in the long run (something to be achieved by sustained and serious cuts in armaments and military spending, as well).

  • John Sully on July 19, 2011 1:05 PM:

    AMT is something that was originally meant to ensure that very high income people paid some tax by limiting deductions iff the exceeded a certain level AND your total tax due was below a certain level. It was instituted in the late '60s or early '70s.

    Unfortunately the brackets for the AMT were not indexed to inflation, so as time went on it caught more and more middle and upper middle class people, especially people with large families or large mortgages. This is not fair, and the brackets for the AMT ought to be reset and indexed to inflation just like the brackets for income taxes on the normal schedule.

    Eliminating it however is another giveaway to the rich...

  • c u n d gulag on July 19, 2011 1:05 PM:


    When it comes to "gangs," why is it that I'd rather be the victim of Crips or Bloods than the political kind?

  • bardgal on July 19, 2011 1:07 PM:

    Is the media ever going to talk about the seditious behavior of the GOPCrazies�?

    - Signing a loyalty oath to King Norquist that they hold above their oath of office to the Constitution should be grounds for removal from office, and is so beyond a conflict of interest.

    - Refusing to DO THEIR JOB - per the words of the 14th - CONGRESS SHALL ENFORCE (America to pay her bills) - by not only threatening to vote NO, but trying to push this off onto the POTUS - is clear dereliction of duty.

    - WILLFULLY trying to tank the US economy over their blind hatred for the POTUS and their delirious thirst for power by vocally saying it's their ONLY OBJECTIVE - is destructive to the well being of the country - which is WHY THEY'RE DOING IT.

    I am beyond giving a rats ass about the details. These people who are screaming bloody murder about Obama using the residence for campaigning (legal) are the ones who need to be arrested for being a CLEAR AND PRESENT DANGER TO THE UNITED STATES.

  • Elie on July 19, 2011 1:09 PM:

    All of this wringing and twisting is just about how to get the right "story" to save the very damaged Republican face, getting more and more damaged by the day.

  • Dutch on July 19, 2011 1:11 PM:

    I am sure that both parties come to an agreement if the agreement is to lower taxes and cut entitlements. Who in their right mind believes that by eliminating AMT we could generate more tax revenue. if that is true where are all the extra trillions we should get from one decade of Bush tax cuts.

  • Danp on July 19, 2011 1:14 PM:

    Unfortunately the brackets for the AMT were not indexed to inflation, so as time went on it caught more and more middle and upper middle class people

    I know that's the conventional wisdom, but is it just a coincidence that this became an issue after the Bush tax cuts? Is it not possible that the AMT hits more people because the tax rates, even at the top tier, are so low now? I don't recall inflation being so high in the early 2000's.

  • j on July 19, 2011 1:21 PM:

    Why is Coburn not the subject of the ethics investigation when he brokered a payoff for Ensign's mistress?

  • Jilli on July 19, 2011 1:23 PM:

    Think Progress has some good info on this...here's a taste -

    "Coburn calls for privatizing the Direct and Perkins loans programs offered by the federal government and eliminating all remaining federal postsecondary programs except for discretionary Pell Grants and Iraq and Afghanistan Service Grants:"

    "End the Direct and Perkins loan programs so student loans are made by exclusively by private lending institutions without federal debt issuance or federal subsidy. This proposal calls for a transition period to ensure student loan funding is not abruptly disrupted. With projections that the Direct Loan program will issue nearly $1.4 trillion in public debt over the next decade to fund student loans, this change would achieve significant savings for the taxpayer. [...] Eliminate all remaining federal postsecondary programs except for the discretionary Pell Grant program and the Iraq and Afghanistan Service Grants which provide grant funding to children who had a parent died in Iraq or Afghanistan, and who do not receive the traditional Pell grant. "

    "According to data from the Department of Education, 15.2 million students benefited from Federal Direct and Perkins Loans alone in 2010. Its unclear how Coburn expects the privatization of these lending services to work, but if history is any judge, these privatized loans will be more expensive for both students and taxpayers. And this doesnt even account for the millions of other students who benefit from the other postsecondary programs that Coburn wants to eliminate. One has to wonder if these students consider their education fat to be cut from the federal budget. "

    http://thinkprogress.org/education/2011/07/19/272503/coburn-debt-reduction-fat/

  • Johnny Canuck on July 19, 2011 1:26 PM:

    Without additional information, I haven�t the foggiest idea could make $1 trillion in revenue look like a $1.5 trillion tax cut.

    I think this is how it works: CBO scores based on what the law is not on what it is likely to be. The AMT always gets deferred but CBO would have scored it as if it was payable. If this bill actually terminates the AMT then it would get credit for whatever the AMT was theoretically going to produce as revenues for the next 10 years (even though everyone knows that an AMT fix is always passed to delay it actually raising revenue)

  • Joe Friday on July 19, 2011 1:30 PM:

    "It would generate a significant amount of revenue out of tax reform and reduction of tax rates, which authors believe would spur economic growth."

    The "reduction of tax rates" is just more tax cuts for the Rich & Corporate, and "tax reform" is just raising taxes on the Middle-class and Working Poor.

    If this actually would "spur economic growth" we would have had the highest GDP in American history over the last decade.

    Nuthin' but more failed RightWing economic policy.

  • Marko on July 19, 2011 1:30 PM:

    Aren't there enough semi-sane Republicans in the House to join with Dems to obtain a majority to pass a debt limit increase even over the outraged objections of the tea party nuts?

    So far, there are none. Zero. Nada. El Zippo!

    Is the problem that Boehner won't allow something like that to come to a vote?

    Boehner would allow it, but Eric Cantor (R-VA) the House Minority Leader, has kept them all in his Tea Party camp to vote against any debt limit increase that does not go 100% their way (all cuts, no revenue increases).

    Just for the record, up until now, a clean bill (no strings attached, no cuts, etc) has always been passed by whichever party is in control of the House.

  • dr. bloor on July 19, 2011 1:39 PM:

    Just relying on media accounts, Texas Kay Bailey Hutchison (R), Nebraskas Mike Johanns (R), Colorados Michel Bennet (D), Ohios Rob Portman (R), and Delawares Chris Coons (D) all came away impressed, and said so on the record.

    Uh, yeah. Let us know when we hear from Whitehouse, Reed, Schumer, Boxer and Sanders, please.

  • Mike D on July 19, 2011 1:58 PM:

    The only glimmer of hope I see is that Coons likes it. He's one of the good-uns. But the devil is in the details, natch.

  • mcc on July 19, 2011 2:48 PM:

    "And then theres the House, which continues to believe even a penny of additional revenue is an assault on all that is good and holy."

    Or maybe they're just really good negotiators.

    Just sayin

  • ohhenery on July 19, 2011 3:57 PM:

    Who are these magical mythical small business owners? Clear half a mil a year and still struggling to pay your workers? Boo-hoo. Country club dues getting to you? Boo-hoo-hoo. I can't get even get rid of that hummer anywhere near the price that the govt. paid for it. Boo-hoo-hoo-hoo. Can't those lazy assholes fix the goddamned potholes. Boo-hoo-hoo-hoo-hoo. It's fannie mae and freddie mac's fault. Boo-hoo-hoo-hoo-hoo-hoo. Honey, let's go to Las Vegas next week. I'm feeling lucky. Boo-hoo-hoo-hoo-hoo-hoo-hoo. Boo-hoo. Boo-hoo. Hoo. Hoo. Hoo.

  • Neo on July 19, 2011 4:00 PM:

    The Gang of Six gives us yet another of those down payments on the debt. This is another of those SALT-treaty like things, when we need a real START-treaty like bill .. in other words, this is Carter when we need Reagan.

  • RobM on July 19, 2011 10:53 PM:

    Could you please stop being a contestant for the position for the biggest douche in the universe? You are a contestant because you continue to call Social Security and Medicare an entitlement. For reasons of being a liberal alone you should stop because you are allowing your enemy, the American Taliban, to define the terms of the battle.
    The realty is they are self funded programs just like the highway trust fund. The money is only missing because the fund investment banker is the Congress, who borrowed it. Now that they can't pay it back they are telling the recipients you have to cut back. Well that doesn't wash because there is no reason to look at the trust funds any differently than money market funds than traded below a dollar during the meltdown phase of our current Great Recession, i.e. the money should be paid w/ no changes to the program.
    Now stop being a douche.

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