A bipartisan group of senators — called the “Gang of Six” — unveiled a deficit reduction plan Tuesday that would save almost $4 trillion over the next decade and could leverage a deal on raising the debt ceiling before an Aug. 2 deadline.
President Barack Obama welcomed the deficit-cutting plan, which employs a mix of spending cuts and revenue generators. Republicans in Congress have resisted Obama’s call to quickly raise the debt ceiling, demanding that spending and the deficit be reduced at the same time. The U.S. could default on loan payments and other obligations if the debt limit isn’t raised by Aug. 2.
While the complicated deficit-cutting plan won’t be complete by the Aug. 2 deadline to raise the debt ceiling, supporters say it can serve as a template for the so-called “grand bargain” sought by the White House.
The Gang of Six proposal would include cuts to Medicare and Social Security, as well as federal employee pensions and farm subsidies. The plan would curb the growth of military health care and retirement costs, and make changes to the loophole-laden U.S. tax code.
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