Senate group offers $3.75 trillion deficit cuts

Reuters News
Posted: Jul 19, 2011 1:44 PM
Senate group offers $3.75 trillion deficit cuts

By Richard Cowan

WASHINGTON (Reuters) - A bipartisan group of senators on Tuesday revived an ambitious budget plan that could provide new ideas for breaking the impasse in Congress over raising the country's credit limit by August 2.

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 U.S. borrowing authority by August 2, 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.

(Editing by Sandra Maler)