Video: Obama endorses bipartisan deficit plan

  1. Closed captioning of: Obama endorses bipartisan deficit plan

    >>> now to washington and that fierce fight over raising the debt ceiling. is there a light at the end of the tunnel ? our political director and chief white house correspond echentcorresponde nt, chuck todd . chuck, good morning.

    >> good morning, ann .

    >> well, the president, as you know, is endorsing this emerging bipartisan so-called gang of six plan. promising?

    >> well, it's promising in this respect, is that it's clearly a vehicle to do a big deal on deficit reduction at some point this year. but this is not going to be the piece of legislation that raises the debt ceiling. time is running out on that front. even the president yesterday, when he came out, endorsed it, hinted at that which is why this backdoor legislative gymnastic deal that mitch mcconnell and harry reid are coming up with is still going to be the thing that raises the debt ceiling. but this -- you know, one of the reasons the president endorsed this, conservative oklahoma senator tom coburn endorsed it in the morning. two hours later the president did. the closest friend in the republican party the president has is tom coburn , ann .

    >> okay. now, at the same time, according to this new nbc news/" wall street journal " poll, while 55% of americans believe not raising the debt ceiling would be a, quote, real and serious problem, there doesn't seem to be a consensus on just exactly what washington should do, chuck.

    >> well, there isn't. now, when we presented them the two options being debated last week, the president's idea of this $4 trillion which is similar to gang of six, a $4 trillion mix of some tax hikes plus some cuts and reforms to entitlements like medicare and social security versus a cuts-only approach that house republicans were pitching, it was a landslide as far as what the public preferred. 58% preferring the president's vision on that front versus 36% on theirs. so this is a case where the president and the white house , they're seeing the same numbers. and that's why they jumped so quickly and so fast on this gang of six proposal.

    >> okay. but it's interesting because there's so much writing on this in terms of, you know, when you polled and you asked people who gets the blame if there isn't a deal if the debt ceiling is not raised. let's take a look at the numbers.

    >> it is. and that's a mixed bag. 35% would blame the president and democrats. 39% would blame republicans. but, you know, most of this poll shows that the middle of the country and a majority of americans basically don't like the republican position on this debt plan. but who does like the republican position right now on all of these fronts and, you know, sticking to their guns on taxes? tea party supporters. and that is why you're seeing republicans, they're caught between their tea party supporters who want them to do one thing and frankly independents who want them to do another. in 2010 , ann , independents and tea party supporters were on the same page. they were all angry at the president and democrats. they're not on the same page on this debt plan.

    >> very true words. chuck todd , thanks so much. staff and news service reports
updated 7/20/2011 8:22:32 AM ET 2011-07-20T12:22:32

President Barack Obama gave his endorsement Tuesday to a deficit reduction plan offered by a bipartisan group of six senators, urging congressional leaders to use that blueprint as the basis for a bill that he can sign into law before the Aug. 2 debt limit deadline.

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He acknowledged that his backing of the “Gang of Six” proposal “doesn’t get us out of the House of Representatives" and "doesn’t get us out of the Senate” and cautioned “there are still going to be a lot of difficult negotiations” before the plan could be approved.

Obama's backing seemed to be a potential breakthrough.

He called the plan “a very significant step” because “Democratic senators acknowledge that we’ve got to deal with our long-term debt problems that arise out of our various entitlement programs” and Republican senators “acknowledge that revenues will have to be part of a balanced package that makes sure that nobody is disproportionately hurt” from reducing future budget deficits.

Obama spoke several hours before the House passed legislation that would require trillions of dollars in spending cuts, a two-thirds vote of both houses of Congress for any tax increase, and a balanced-budget constitutional amendment in exchange for an increase in the debt ceiling.

The Republican bill, which stands no chance of enactment in the Democratic-controlled Senate and which Obama said he'd veto if it reached his desk, passed on a vote of 234 to 190, with five Democrats voting for it and nine Republicans voting against it.

Two GOP presidential contenders, Reps. Ron Paul and Michele Bachmann, voted against the bill. Paul called it "a distraction" and predicted that the United States would default on its debt.

House vote eclipsed by 'Gang of Six'
But in any event the House vote was eclipsed by the "Gang of Six" proposal.

Obama said he'd invite House Speaker John Boehner and other congressional leaders to come to the White House for negotiations on the plan.

Video: Obama: We're in the 11th hour'

The “Gang of Six” plan would:

  • Aim to reduce deficits by $3.7 trillion over ten years;
  • Call for the elimination of some tax deductions and preferences and the reduction of others, raising $1 trillion in new revenue, while also reducing marginal income tax rates to as low as 23 percent for high earners;
  • Require $145 billion in cuts to national defense and homeland security operations and hundreds of billions in cuts to other federal departments;
  • Shift to a new measure of inflation called “chained CPI” which would have the effect of reducing future Social Security benefits by mandating smaller annual cost-of-living adjustments.

House Majority Leader Eric Cantor said in a statement that the tax rates in the plan and Obama's endorsement of them "are a positive development and an improvement over previous discussions."

But he added, "I am concerned with the Gang of Six’s revenue target, the plan fails to significantly address the largest drivers of America’s debt, and it is unclear how the goals of tax and entitlement reforms would be enforced."

Video: NBC News/WSJ poll: What Americans expect from debt debate (on this page)

The group which devised the proposal is composed of three Republicans, Saxby Chambliss of Georgia, Mike Crapo of Idaho, and Tom Coburn of Oklahoma, plus three Democrats, Kent Conrad of North Dakota, Mark Warner of Virginia, and — perhaps most importantly — Senate Majority Whip Dick Durbin of Illinois.

As the Senate's chief Democratic vote counter, Durbin can be expected to have an acute sense of what would garner enough votes to overcome a filibuster.

In addition to the six who designed the plan, it quickly won backing from Sen. Lamar Alexander, R-Tenn., who said, "This is a serious, bipartisan proposal that will help stop Washington from spending money we don't have.”

Another Republican senator, Mississippi's Roger Wicker, told Reuters it was "highly possible" for the plan to get 60 or 70 votes in the Senate.

The plan also won support from two centrist Democratic senators, Colorado's Michael Bennet and Delaware's Tom Carper.

Big unknowns remain
But there were big unknowns as of Tuesday afternoon, including:

  • Would Boehner, Cantor and a majority of the House GOP caucus vote for a plan which aims to raise revenues through eliminating tax deductions and preferences?
  • Which taxpayers would end up paying more if the plan were to become law?
  • Exactly what cuts in future benefits would the plan make in Medicare and Social Security?
  • How much opposition would progressive and liberal groups generate to the plan, especially among House Democrats?

The "chained CPI" inflation gauge in the plan would mean “cutting the benefits of every beneficiary,” said Nancy Altman, co-chair of Strengthen Social Security Campaign, a coalition of unions, women's groups and others. "The whole idea is that these benefits keep purchasing power intact. If you’re not giving full and accurate (cost of living) adjustment, then the benefits erode over time.”

Justin Ruben, executive director of the left-leaning group, said the “Gang of Six” plan “appears to ask seniors, the middle class and the poor to bear the burden of deficit reduction, with cuts to Social Security benefits, billions in stealth cuts to be named later, and no real effort to make corporations and millionaires pay their fair share.”

At his White House press briefing Obama said an alternative debt ceiling increase plan being crafted by Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid “continues to be a necessary approach to put forward in the event that we don’t get an agreement” on the "Gang of Six" proposal.'s Tom Curry contributed to this report.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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