Saxby Chambliss and restored Gang of Six join debt-ceiling debate

Something worth interrupting a vacation for: U.S. Sen. Saxby Chambliss and a restored Gang of Six this morning presented a $3.7 trillion deficit-cutting plan in a bid to couple the mix of cuts and revenue increases to a Senate solution to the debt-ceiling argument.

“Some of the people who don’t want to solve the problem will be critical of it,” said Chambliss, who called only a few minutes ago. The senator said the plan had yet to be presented to House Republicans, where the proposal – based on a bipartisan commission’s recommendations last year – is expected to come in for some rough sledding.

Chambliss reported 50 senators in attendance at the morning session. Among them was Tom Coburn, R-Okla., who months ago had left the bipartisan negotiations led by Chambliss and Mark Warner, D-Va. Coburn endorsed the results, and Chambliss said the presentation won a warm, bipartisan reception.

The plan, said Chambliss, is to couple the deficit-reduction outline to the proposal by Senate Republican Leader Mitch McConnell, R-Ky, that allows President Barack Obama to raise the debt ceiling without congressional approval — averting future deadlines like the one faced by the federal government on Aug. 2, when it will lose its authority to borrow more money, and add to a $14 trillion deficit.

Chambliss said $2.7 trillion in cuts would be accomplished through adjustments to Medicaid and Social Security. Details would be worked out through a bipartisan arrangement later, but Chambliss said an increase in the retirement age and means testing were likely to be adopted for Social Security.

Federal revenue would be increased $1.1 trillion over 10 years through changes to tax deductions currently granted for home mortgage interest, charitable giving, and health care insurance.

But overall, Chambliss said, the package would result in a lowering of personal and corporate income taxes. “We reduce spending, reform entitlements, and reform the tax code,” he said.

Increased economic growth would add another $1 trillion for an overall savings of $3.7 trillion.

The tea-party faction of the House Republican caucus has said it would not support any kind of revenue increases. But Chambliss thinks enough House Republicans might join with Democrats in the chamber to push the idea through.

“I’m at least cautiously optimistic that we’ve got another idea on the table,” he said.

- By Jim Galloway, Political Insider

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134 comments Add your comment

C. Tampa Ironworse

July 19th, 2011
12:28 pm

I’m no longer voting…it only encourages them.

gsueagle

July 19th, 2011
12:42 pm

Saxby is a first class RINO . he looks after those farm subsidies.

grizzybear

July 19th, 2011
12:48 pm

both parties brought on this mess by themselves,so the average voter gets shafted for their ineptness! you can rearrange the furniture on the deck of the titanic,but the results are still the same!

Jack P

July 19th, 2011
12:49 pm

Oh those “increased economic growth” predictions are among the biggest political scams around. Only the dumb masses fall for that con job.

kc

July 19th, 2011
12:53 pm

can reasonable people support budget cuts of 2-3trillion and some revenue increases that are economically (costvsbenefit) justified, not rank and file business deducts, especially small business….like hedge fund managers getting 15% tax rate or companies getting tax credits for foreign investment or offshoring jobs? it may take some time to hash out cuts and revenue increases, but could we settle on that goal?

td

July 19th, 2011
1:20 pm

kc

July 19th, 2011
12:53 pm

“like hedge fund managers getting 15% tax rate”

You forget that those 15% rates also relate to the 401k and retirement accounts of most of the middle class people of our country. You start messing with those rates then you start effecting the money the middle class has to retire on.

James

July 19th, 2011
1:25 pm

Saxby refuses to cut agriculture subsidies which include the huge food stamp SNAP program being heavily advertised to get more moochers to sign up. Watch him sell out conservatives on this budget deal. Ask him about the $150 million in loan guarantees and taxpayer money thrown away on the two bankrupt ethanol facilities in Georgia. Goode ole Saxby.

td

July 19th, 2011
1:34 pm

“tax deductions currently granted for home mortgage interest, charitable giving, and health care insurance.”

So lets see if we can talk about the consequences on the middle class for these decisions:

Mortgage interest: The single biggest wealth producer for the middle class. Now lets not give incentives for the middle class to save and build wealth since the poor has shown they can not pay their bills.

Charitable giving: If we do not give to charities then the government will have to find a way to replace all this money. Can we say more growing government more.

Health Care insurance: Companies are going to be forced to provide health insurance to its employees and they are no longer going to be given a tax deduction. Is this an incentive for them to hire more people or to outsource more jobs overseas?

These are three of the biggest tax breaks for the middle class. Now we want to get rid of them and will eventually lead to more government programs to take care of more people. God what a great socialist country we live in.

YeahRight

July 19th, 2011
1:35 pm

Any politician that signs a ‘no tax’ or any other oath that supersedes their constitutional responsibility will NEVER get my vote. Our nation was founded on serious compromise – not hard core ‘dig in your heels’ dogma.
All spending, tax rates, subsidies and exemptions should be on the table for all parties involved in solving this mess. Failure to do so is a failure of leadership, and a failure to our nation.

Southside GOP

July 19th, 2011
1:35 pm

If revenue enhancements is what it takes to reform social security, then so be it. I have long argued that we should eliminate itemized deductions that have nothing to do with the production of income, i.e. health insurance, vacation home interest deduction etc.

I do think that the charitable deduction should remain as charitable donations at least in part reduce the need for government services.

[...] JournalGang of Six Back Together – Trying to Score Debt Reduction DealFox News (blog)Atlanta Journal Constitution (blog) -Forbes (blog)all 577 news [...]

Lapsang Sochang

July 19th, 2011
1:46 pm

Saxby is one of those Washington guys who has so much”gravitas” that he serves as an anchor. Why is it that Georgia, a state with one of the more conservative voting blocks in the country, produces such weak kneed senators? Saxby needs to host a dinner party with Susan Collins, and Olympia Snow and Scott Brown so they all sit around and talk about stupid and short sighted we tea party people are.

No Longer Republican

July 19th, 2011
1:47 pm

Nice try Saxby but you are still getting this done on the backs of the middle class. Mortgage interest, charitable giving, and healthcare insurance are vital options middle class taxpayers have. Take those away and you ARE increasing taxes, again on the middle class. Let the WEALTHY help. End the Bush tax cuts for those who make over $250K.

And why cut SS? SS has never added one penny to the deficit. If Congress would not use SS money for other projects there would be no problem with SS. Do what it right for once Saxby!

kc

July 19th, 2011
1:51 pm

td, on hedge fund issue: http://www.epi.org/publications/entry/pm120/

it addresses the compensation of hedge fund managers

[...] OlympianDOCUMENT: Gang of Six Deficit Plan Executive SummaryNational JournalFox News (blog) -Atlanta Journal Constitution (blog)all 588 news [...]

george

July 19th, 2011
1:53 pm

republican (lame)— democrat (evil) doesn’t matter. Can’t trust lame or evil.

rino

July 19th, 2011
1:54 pm

td, you took the words right out of my mouth

dixiesdemons

July 19th, 2011
1:56 pm

Damn !!! Saxby got off of the golf course long enough to present a plan .. You normally only hear from him at re-election time.

kc

July 19th, 2011
2:01 pm

maybe this quote helps on hedge fund…taken from wsj article

But Victor Fleischer, the University of Colorado professor whose paper on the subject helped prompt Congress to act, said that carried interest should not qualify as capital gains because fund managers risk mostly other people’s money rather than their own. “They’re being paid a fee for a service, so it’s fair that they would pay the same rates as others who perform services,” Mr. Fleischer said.

poopsie

July 19th, 2011
2:02 pm

All okay, but I am more and more in favor of the wealthy suffering a tax increase. Eevery other facet of the citzenship is giving up something.The wealthy are more able to pay this than anyone. Now, I have been a Republican since 1964, but if you say this will hurt the economic recovery, I say ‘what recovery’.Their tax status has been here for years, and we still have unemployment close to 10%.i probably have voted Republican for the last time.

[...] Gang of Six Deficit Plan Executive SummaryNational JournalFox News (blog) -Forbes (blog) -Atlanta Journal Constitution (blog)all 594 news [...]

bill

July 19th, 2011
2:07 pm

If you increase revenue you increase spending. Politicians cannot control spending. If spending was held to revenues collected we would have a balanced budget. Sorry, I don’t want to give them another nickel. I am 72 years old and paid SS taxes all my life and owned a business that paid as an employer so I paid both sides and now y’all want to means test! Really?

td

July 19th, 2011
2:16 pm

kc

July 19th, 2011
1:51 pm

First my friend thank you for the article link, it was an interesting read. The article has some flaws. The 2% off the top is commission and as such is taxed at 35%. The 20% they can make if the fund improves is based on if stocks go up and down and as such is a capitol gain and should be taxed at the 15% price. If you are a day trader you are taxed the same way because you are being taxed if you make a gain or not.

What will be the unintended consequence if you tax these managers at a higher rate. My prediction is that either these managers would all move overseas so then we would not get the 35% on the 2% or that they would charge more commission to handle these accounts and thus the amount of money in our 401K accounts would go down.

John Galt

July 19th, 2011
2:28 pm

There is no plan that will be universally accepted. At first glance this seems like a step in the right direction.

I am a “no taxer” but this deficit is beginning to threaten our entire economy. I think an extra $1 of tax for every $3-$4 of spending cuts is about right.

Good lord, we need some grown-ups on the Hill and ESPECIALLY in the White House.

td

July 19th, 2011
2:37 pm

John Galt

July 19th, 2011
2:28 pm

Let’s see the spending cuts first for at least two years and then we can consider the revenue increases.

GO Pee

July 19th, 2011
2:38 pm

I hope you tea bagging morons are happy.

RGB

July 19th, 2011
2:39 pm

td’s comments are on target regarding:

“Federal revenue would be increased $1.1 trillion over 10 years through changes to tax deductions currently granted for home mortgage interest, charitable giving, and health care insurance.”

So Chambliss must believe we have too many homeowners, too much charitable giving, and that too many people have health insurance. Because if we’re raising taxes on these items we’ll get less of them.

Does anybody really believe that we’ll get spending cuts in exchange for raising taxes? Anybody at all? See: Reagan, Ronald; Bush, George H.W., et. al.

>>”poopsie”, thanks for self-identifying. It’s a real time-saver.

chance

July 19th, 2011
2:41 pm

If the house republicans vote for any riase in the debt or increase in taxes for anyone they will be gone in 2012. The democrats know they are toast in the next election. Obama will never win and he knows that. So he simply reduced his timeline to end the country he hates. The republicans better not waiver on this!

yuzeyurbrane

July 19th, 2011
2:49 pm

Let’s see. $2.7 trillion in “adjustments” to Medicare and SS out of the $3.7 trillion in total. A trillion here, a trillion there. . . pretty soon you’re talking real money. Saxby is a Senior and so is his 90 something momma who seems pretty sharp on tv. I think his momma ought to take Saxby over her knee and spank him for calling a cut an “adjustment”. That’s like a “modification” instead of a change. Enough spin-speak. Anything of this magnitude would destroy SS and Medicare. Saxby knows it and wants it. He has deep pockets and takes good care of his momma who is living out her life in dignity. What about the rest of us who aren’t so fortunate? I am a Senior and I approve this message.

KCast

July 19th, 2011
2:53 pm

Trying to be open minded here….hopefully the mortgage interest deduction change will affect those with homes in the $750,000 and above range.

DannyX

July 19th, 2011
3:05 pm

“Let’s see the spending cuts first”

Spending cuts first? How about instead we are shown how the Bush tax cuts benefited the economy like we were told they would. Explicitly. “Cut taxes and watch an economic miracle take place,” we were told.

In fact Republicans believed so much in their fantasy they went ahead and spent the anticipated windfall on things like the socialist Medicare Part D, and the big government No Child Left Behind.

When are the tax cuts going to start paying for all this stuff the Republicans bought?

No Longer Republican

July 19th, 2011
3:16 pm

Well said DannyX!

Joe Kelly

July 19th, 2011
3:16 pm

Hey td…that cap gains tax rate of 15% is NOT what people pay when they withdraw 401K money in retirement. Those withdrawals are taxed as ordinary income, just like the income tax you pay from your regular pay check when you are working.

G. Ft. Lauderdale Tungstenmediocre

July 19th, 2011
3:22 pm

Why is it that your average American has to live within their means, but people act like you’re stupid if you want government to live within their means? The federal government is actually quite limited in its power, if you hold to a strict interpretation of the Constitution. So it’s no wonder that liberals needed a “progressive” reading of the Constitution that allows government to do most anything in this country (paraphrasing Pete Stark). One of the things government is supposed to do is provide for the national defense. Yet whenever liberals start talking about spending cuts, the first place they look is defense spending. No where in the Constitution does it say the government is supposed to take care of you in retirement, and yet both parties want to hold on to those items. It’s all about taking money from one person and giving to someone who is more likely to vote for you…err, I mean, someone who is more in need.

td

July 19th, 2011
3:22 pm

DannyX

July 19th, 2011
3:05 pm

I agree that NCLB and Medicare part D were huge waste of money. We should eliminate both programs immediately. Matter of fact lets just eliminate the entire Federal DOE. Education is a state issue and not a Federal matter.

SODDI

July 19th, 2011
3:23 pm

Chambliss is easily one of the most corrupt politicians in the Senate. Why ANYONE, right or left, would think that any deal he helped broker would benefit anyone except who he really represents – hint: not Georgians – it’s a wonder.

Chambliss’ son represents the Chicago Mercantile Exchange and Commodities Exchange as a lobbyist. He had to get a special waiver to lobby Daddy’s Senate committee. But now Daddy Saxby speaks the Commodities Exchange party line – AS IF BY MAGIC.

Go ahead, write to Saxby Chambliss. Tell him gas prices are too high. Tell him food prices are too high. Tell him that you believe that commodities speculators are driving up the costs of staple goods like wheat and rice and corn.

You will get a response that might as well have been crafted by a Commodities Exchange public relations person.And if you read beneath the shiny veneer, you will discover that Saxby Chambliss intends to do nothing at all to help his constituents who might be suffering.

Because Saxby Chambliss is a wholly owned and operated subsidiary of the Commodities Exchange.

td

July 19th, 2011
3:25 pm

Joe Kelly

July 19th, 2011
3:16 pm

Yes Joe it is because it was deferred income when you put it in (and you are paying a lesser tax rate now because you are in a lower tax bracket). Now any gains you made and was rolled over into your account during your work years was a capitol gain and as such you paid capitol gains taxes.

Ouch.

July 19th, 2011
3:36 pm

@TD – “Matter of fact lets just eliminate the entire Federal DOE. Education is a state issue and not a Federal matter.”

Unintended consequences – no more billions of fed money coming to the states for education. The states have to cough up the whole shebang. Can Georgia truly afford to do that? Can any state? Are we prepared for the rise in the rate of our state taxes to fund our schools by ourselves? If we are, then go for it.

Treeofwoe

July 19th, 2011
3:38 pm

Mortgage interest deduction changes: If they are talking about doing away with the mortgage deduction on 2nd or vacation homes then I have no problem with it. IF they are considering lowering the interest deduction based on mean’s testing or size of house / mortgage then it’s worth considering. If it’s any other consideration beyond those two then it’ll be dead on arrival in the house.

Charitable contributions: opposed to changes to charitable contribution deduction as it will hurt charities plain and simple. Who I might add are able to do the much more good for the same amount of money.

Health care insurance deduction: unless they are talking about mean’s testing or a graduated scale based on income then don’t do it.

Agreeing to the amount to cap each department’s spending to without getting that set in stone BEFORE the limit is raised is wishful thinking. As always the Democrats will pull the wool over your eyes saying yes we “promise” to work with you to cut the fat in these departments. Then, after the leverage is gone, they do nothing but continue spending. Please don’t fall for that same B.S.

RetiredSoldier

July 19th, 2011
3:45 pm

I believe you mean the Obama tax cuts. You know the tax cuts he was opposed to (while running for office)before he suppoerted them (last Dec.)before he opposed them (now). Is anyone confused yet?

Road Scholar

July 19th, 2011
3:49 pm

Bill: “If you increase revenue you increase spending. Politicians cannot control spending.”

Did you read the article? The increase in revenue based on reducing tax loopholes and deductions will….are you ready this time?…to be offset by lower tax brackets. Also th budget amounts to the Fed GovernmentsDepartments would be frozen, thus freezing the budget.

Road Scholar

July 19th, 2011
3:51 pm

Retired: who demanded that the tax cuts be extended? Yes Pres Obama signbed the bill; now again, who insisted the tax cuts be extended?

RetiredSoldier

July 19th, 2011
4:01 pm

Road-

Let’s see, you had a majority democratic senate, a majority democratic house and a democrat in the White House. Does that answer your question?

So now we defend presidents that sign bills they don’t support because the “bogeyman” made me do it? Please Road, give everyone more credit than that.

RGB

July 19th, 2011
4:13 pm

Buckhead

July 19th, 2011
4:14 pm

Interesting . . . saw this on the Beacon this morning: http://www.beaconcastmedia.com/cover-/Chambliss-May-Be-Key-To-Budget-Deal–2989

Take a look for more

duke

July 19th, 2011
4:16 pm

As soon as I saw Chambliss’s name on this thing, I figured it was another sell-out. But I couldn’t find the hook. Now I see it. The whole thing is tied to McConnell’s plan to let Obama raise the debt ceiling without Congressional approval. So the rest of the deal is meaningless.

As Sarah Palin says, this President will never make spending cuts. Even if he intends to, which in my opinion he does not, he does not know how to do it. He has never had to exercise that kind of executine authority; and after two years on the job, we can safely say he has no intention of learning.

kc

July 19th, 2011
4:18 pm

td, i am willing to bet most americans could care less if these “patriotic” american hedge fund managers move elsewhere. these folks after providing a service and earning money are then free to invest those funds and get the 15% capital gain treatment…maybe you’ll change your opinion when you learn cheleas clinton works at hedge fund…not sure if that qualifies her for 15% marginal tax rate

td

July 19th, 2011
4:18 pm

Road Scholar

July 19th, 2011
3:51 pm

I thought the President had the power of the veto? If he did not want to sign the bill then he would have vetoed it. He wanted the spending that went with the bill and now immediately started to attack the tax cuts (political reasons) but has not mentioned the spending increases.

DannyX

July 19th, 2011
4:21 pm

Call it what ever you want, Bush Obama tax cuts? Obama Bush tax cuts? Whatever.

The tax cut deal pushed by Republicans and signed by Obama increased the deficit by billions of dollars. Again we have Republicans causing direct damage to the deficit with tax cuts and increased spending.

Probably why Congressional Republicans now only have a 28% approval rating according to today’s Gallup.. Down 5 points since November.

G. Mortensen

July 19th, 2011
4:26 pm

We’ve been down this road before. Tax cuts first and maybe down the road a few cuts. This is a horrible plan and Saxby should have a challenger in his next election. He is the type of politician who speaks conservative at home and votes like a Democrat in Washington. This venal man needs to go.