‘Gang of Six’ Senators Plan to Resolve U.S. Debt

Bipartisan Efforts Being Made to Tackle Deficit Crisis

by Justin Smith on May 23, 2011

For several months, a private conclave of six senators met privately to solve the U.S. deficit crisis. As the government rapidly approaches its borrowing limit – $14.3 trillion – many politicians are scrambling to delay the inevitable default, which could devastate economies worldwide and plunge America into a second economic crisis. The bipartisan group known as the “Gang of Six” aims to propose a refined plan for reducing $4 trillion in borrowing over the next ten years.

The coalition of senators includes three Democrats: Sen. Mark Warner of Virginia.; Sen. Dick Durbin of Illinois; and Sen. Kent Conrad of North Dakota. Representing the Republican Party are Sen. Saxby Chambliss of Georgia, Sen.Tom Coburn of Oklahoma, and Sen. Mike Crapo of Idaho. All six hope to discuss their plan at Vice President Joe Biden’s budget reduction talks in late May.

Compromise in the current political environment will not be easy. Democrats and Republicans both refuse to increase federal borrowing limits until restrictions are imposed upon long-term spending and debt resolution. Treasury Secretary Timothy Geithner has not yet specified the steps being taken to address the deficit, though he claims the Treasury may be able to push the default date forward two months into July.

The lit fuse on the federal default has prompted a flurry of action in Washington. Both parties have proposed their own reforms, but growing sentiment indicates a truly fair joint agreement may be the only possible solution. The Gang of Six includes four members from President Obama’s deficit commission.

Efforts by the small group of senators thus far have led to some progress in establishing core legislative targets. Two major talking points are tax revenue increases and public spending cuts for services such as Medicare and Social Security. Both issues, however, are potentially toxic. GOP representatives and their wealthy backers vehemently object to many potential tax reforms, which they feel are specifically biased against the big business that funds campaign coffers. Democrats fear the backlash of their constituency if they vote to cut medical benefits.

Hope lies in an agreement for simultaneous risk across the board in order to prevent the economy from collapsing beneath the weight of the federal debt. The six committee members claim their bipartisan plan will reduce spending by $3 for every $1 in potential debt – much more than previous plans that shied away from addressing volatile issues like federal benefit programs, or eliminating certain tax exemptions.

Analysts eagerly await the chance to compare the new plan to the original proposal by President Obama’s special deficit commission, which made drastic cuts to domestic spending. While the Gang of Six have not yet decided on a specific tax reform plan, they most likely intend to set a series of spending targets as goals for Congress. Discussions of a specific tax plan are another option.

As the default deadline rapidly approaches, pressure is mounting for a solution. Washington’s hostile environment and high tempers among party leaders on both fronts may actually fuel a cooperative effort. Both groups must band together in the face of total economic disaster and make concessions. Whether the Gang of Six can propose a satisfactory plan to establish a truly bipartisan reform remains to be seen.