US hopes for break in debt impasseTuesday 19 July 2011 19.17
A bipartisan group of US senators revived an ambitious budget plan that could provide new ideas for breaking the impasse in Congress over raising the nation's credit limit by 2 August.
President Barack Obama threw his support behind the proposal by the 'Gang of Six' senators, saying it was broadly consistent with his approach on reducing debt and deficits.
Mr Obama urged Senate Majority Leader Harry Reid, a fellow Democrat, and Senate Republican leader Mitch McConnell to start 'talking turkey' about it.
Senate Budget Committee Chairman Kent Conrad, one of the six Democratic and Republican senators who have been working since December on a deficit-reduction plan, said the proposed $3.75 trillion in savings over 10 years contains $1.2 trillion in new revenues.
The group briefed about half of the 100-member Senate and 'the response was very favourable,' Mr Conrad told reporters.
He said the group asked fellow senators to take 24 hours to look at the proposal and 'report back to us'.
According to an executive summary of the plan, it would immediately impose $500 billion in deficit cuts, cut security and non-security spending over 10 years with spending caps, make the Medicare and Medicaid healthcare programmes operate more efficiently and abolish the Alternative Minimum Tax.
Asked whether the plan could become part of urgent negotiations that link deficit reduction to raising the US government's borrowing authority by 2 August, Mr Conrad said: 'Could the two get married? Could they get combined at some point? I'm sure that's possible.'
But leaders must first find out whether the proposal has enough support in the Senate, he said.
However, a senior Senate Democratic aide said, for now, 'there are no discussions' on incorporating Gang of Six ideas into legislation to raise the debt limit beyond $14.3 trillion.