Capitol Hill practically erupted yesterday morning with news that Sen. Tom Coburn had rejoined the bipartisan group of senators known as the "Gang of 6" -- Coburn had previously quit the gang, so his sudden unexpected return was, to Washington budget types, sort of like if Roger Waters had rejoined Pink Floyd and announced a new album, all at once. Or something like that. Everybody freaked out. The Gang of 6 announced they'd struck a deficit reduction deal to trim between $3.7 trillion and $4.7 trillion over ten years, and even though nobody seemed to know the details, President Obama hurriedly voiced his support. For the first part of the day, it seemed as if this might solve the whole debt-ceiling/tax-reform/entitlement-reform issue in one fell swoop.
How to Think About the 'Gang of 6' Hype
Well, it won't. There are a couple reasons why. First, the Gang of 6 plan -- they need an acronym...Go6? -- raises revenue by ending tax expenditures and applying the savings to deficit reduction. House Republicans have refused to go along with this, and, I am reliably informed, shall continue to not go along with this. (One aide I spoke to just laughed when I inquired about the Go6 plan's chances of getting through the House). Even if the plan could somehow surmount this hurdle, there isn't time for it to pass before the debt default date of August 2nd. So it doesn't solve that problem -- and that's the huge problem for the time being.
The best way to think about the plan, which does seem to be drawing significant bipartisan support in the Senate, is as a possible addendum to the Reid-McConnell deal that is still being hashed out and remains, I think, the likeliest outcome. It would raise the debt ceiling, cut about $1.5 trillion and include no revenue increases, and it would establish yet another supercommission to figure out tax and entitlement reform and report back to Congress by the end of the year. Seems to me that the Go6 plan is essentially bucking to become the blueprint for that congressional commission -- that is to say, I think its members will likely wind up jockeying for the slots on that commission and introduce the plan that way. As I understand it, the still-hypothetical commission would have certain advantages that would prevent a filibuster of its recommendations. But that doesn't solve the debt ceiling problem, and I don't see how it would solve the tax- and entitlement-reform problem either, since, despite all the smoke and mirrors and blue ribbons and veneer of no-bullshit bipartisanism, Republicans in the House still won't vote for tax increases.
P.S. If all this budget talk gives you a headache, this guy can help.