US President Barack Obama has thrown his support behind efforts by a bipartisan group of senators to negotiate a new deficit-reduction plan aimed at averting a looming debt default.
Obama said a proposal by the 'Gang of Six' group of senators is broadly consistent with his approach on reducing debt and deficits and he urged Senate Majority Leader Harry Reid, a Democrat, and Senate Republican leader Mitch McConnell to start 'talking turkey' about it.
Obama has said that 'some progress' has been made in tough budget talks, but said the 11th hour had arrived for reaching a deal.
'Some progress was made, in some of the discussions. Some narrowing of the issues,' he told journalists as Democrats and Republicans sought to hammer out a deal to raise the US debt ceiling and agree tough spending cuts.
Financial markets will 'start reacting adversely fairly quickly' if no deal is reached to raise the US debt ceiling and rein in spending, Obama warned.
'If we don't have a basic spirit of cooperation that allows us to rise above immediate election year politics and actually solve problems, then I think markets here, the American people and the international community are going to start reacting adversely fairly quickly,' he said.
The bipartisan group of US senators revived an ambitious budget plan that could provide new ideas for breaking the impasse in Congress over raising the country's credit limit by 2 Aug.
Senate Budget Committee chairman Kent Conrad, one of the six Democratic and Republican senators who have been working since last 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 so-called Gang of Six briefed about half of the 100-member Senate and 'the response was very favorable,' Conrad told reporters.
Conrad said the group asked fellow senators to take 24 hours to look at the proposal and 'report back to us.'
Asked whether the plan could become part of urgent negotiations that link deficit reduction to raising US borrowing authority by 2 Aug, Conrad said: 'Could the two get married? Could they get combined at some point? I'm sure that's possible.'
But first leaders must 'find out does this thing have (enough) support' in the Senate, Conrad said.
A senior Senate Democratic aide, however, said that for now, 'there are no discussions' on incorporating Gang of Six ideas into legislation to hike the debt limit that is bumping up against its $14.3 trillion limit.
Conrad was quick to add that while there are $1.2 trillion in new revenues, the overall plan envisions a $1.5 trillion tax cut that would be achieved through broad tax reforms.
Most Republicans, especially Tea Party members in the House of Representatives, have vowed to block any revenue increases.
