President Obama and Republican House Speaker John Boehner (R-OH) were working against the clock and against resistance from their respective parties Thursday in an effort to strike an agreement on a deficit-reduction deal that could avert a government default in less than two weeks. Congressional and administration officials said that the two men were closing in on a package calling for as much as $3 trillion in savings from substantial spending cuts and future revenue reduced by a tax code overhaul.  If it could be sold to Congress, the plan could clear the way for a vote to increase the federal debt ceiling before the August 2 deadline.  Officials on all sides warned that no firm deal to raise the nation’s $14.3 trillion borrowing ceiling was in hand and tried to play down progress– if only to stave off attempts to bl0ck it or change its shape by hard-liners on both sides of the debate on taxes and spending.

But as negotiations continue between the White House and congressional leaders, Senate Majority Leader Harry Reid (D-NV) Thursday told Senators that he wanted to move up the vote on the House Republican proposal, called the Cut, Cap, and Balance Act as early as today, although the vote was initially set for early next week.  The bill would put in place sharp spending cuts in fiscal 2012, multi-year statutory spending caps, and only allow an increase in the debt ceiling if Congress sends to the states a separate balance budget and tax limitation amendment to the U.S. Constitution.  The bill is expected to fail in the Senate.

Concurrently, the Senate “Gang of Six,” a bipartisan group made up of three Republicans and three Democrats–Senators Saxby Chambliss (R-GA), Tom Coburn (R-OK), Mike Crapo (R-ID), Mark Warner (D-VA), Ken Conrad (D-ND), and Dick Durbin (D-IL) has put a package together of deep spending cuts and new revenues.

President Obama gave the “Gang of Six” plan an unexpected boost in an unscheduled appearance in the White House briefing room.  The President said that the “Gang of Six” plan is a balanced approach that is consistent with the approach he has been urging.  According to a summary of the plan, it would include a two-step process.  First, an immediate bill that would provide for $500 billion in cuts through spending caps and other provisions.  And, second, a process to give congressional committees six months to come up with the remainder of savings and overhaul the tax code.  If a committee failed to meet its target, a group of 10 senators could offer an alternative.

With the August 2 deadline less than two weeks away, all sides have pledged to work continuously on reaching a solution.

 

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