‘Gang of Six’ Debt-Cutting Talks Take Hit as Coburn Leaves
May 18, 2011, 5:56 PM EDTBy Brian Faler and Julie Hirschfeld Davis
(Updates with comments after meeting today from Conrad in fourth paragraph, Chambliss in 15th.)
May 18 (Bloomberg) -- Chances that a bipartisan group of six U.S. senators would agree on a long-range deficit-cutting plan diminished yesterday when a Republican abandoned the talks, saying they were at an impasse over how to cut entitlement programs such as Medicare.
The decision by Senator Tom Coburn of Oklahoma to leave the “Gang of Six” meetings elevates the importance of a separate group of Republican and Democratic lawmakers working with Vice President Joe Biden on a debt-reduction deal.
Coburn said he and his Gang of Six colleagues are “just too far apart on basic issues.” After the group met yesterday in Washington, he said “there’s no reason to sit and talk about the same things over and over.” He said that “right now,” he doesn’t plan to attend any more of the group’s meetings.
The group’s five remaining members met today, and afterward Senator Kent Conrad, a North Dakota Democrat, termed the session “very constructive.” Asked by reporters if the group should now be considered the “Gang of Five,” Conrad said, “I don’t think you should make any conclusion about what the number might be.”
Tough Choices
Coburn’s departure underscored the difficult choices facing President Barack Obama and congressional leaders over issues such as tax increases and cuts in popular entitlement programs in the effort to reduce the government’s long-term deficits.
A deal has become viewed in Washington as a prerequisite to raising the government’s $14.3 trillion debt limit later this year. Many Republicans, though, balk at increasing tax revenue, while many Democrats reject significant changes to entitlement programs.
Other Gang of Six members said they still hope to reach an agreement on a plan that would include spending cuts with increased federal revenue.
Coburn said yesterday the main impasse was over cutting spending for entitlement programs, which have their budgets set by formulas rather than through Congress’s annual appropriations process. “There’s mandatory spending that was not addressed to my satisfaction,” he said. “It’s got to be balanced, and I didn’t perceive where we were was balanced.”
“I am discouraged, I will put it at that,” he said.
Seeking ‘Movement’
He left open the possibility today that he could rejoin the group if there was “movement” in the right direction. “I’m not going into details,” he said when pressed on what it would take to bring him back to the negotiating table.
Coburn was pushing for cuts to Medicare, the government health-care program for Americans 65 and older, that would have gone beyond what leaders of Obama’s debt-cutting commission proposed last year, according to people familiar with the discussions who spoke on condition of anonymity.
Coburn sought an additional $130 billion in Medicare cuts over 10 years -- on top of the $400 billion suggested by the commission -- and second-ranking Senate Democrat Dick Durbin of Illinois rejected the proposal as unacceptable, one person familiar with the talks said.
“We’ll see if we can find a way to re-engage him,” Durbin said in an interview after yesterday’s meeting. “We’ve done an awful lot of work, and he helped us reach this point and I hope we can finish the job.”
‘Disappointed’
Saxby Chambliss of Georgia, the group’s Republican leader, said yesterday the six senators won’t reach an agreement without Coburn. “Obviously, I’m disappointed,” he said. “We’re going to continue the effort. I would hope that eventually we’ll still, as a group of six, be able to come together on some long- term resolution of the issue, but it looks like that’s not going to happen short-term.”
After today’s session, Chambliss said, “We’re going to continue the dialogue.”
The group plans another meeting tomorrow.
Conrad, who is chairman of the Senate Budget Committee, plans to continue to work with the group, as well as “others,” on a deficit-reduction plan, his spokesman, Stu Nagurka, said in an e-mail yesterday.
Idaho Republican Mike Crapo, also a member of the group, “remains hopeful that a resolution can be reached; the group is facing tough issues, but it has faced tough issues before,” spokeswoman Susan Wheeler said in an e-mail.
‘Good Faith’
Senator Mark Warner of Virginia, the Democratic co-leader of the Gang of Six, said in a statement, “I intend to keep working in good faith on these issues because we have made too much progress to stop now.”
The group has been working privately for months to achieve an agreement on a combination of tax increases and spending cuts to reduce the deficit. Its negotiations have been closely followed, in part because its members come from across the Senate’s ideological spectrum.
The group’s momentum has flagged in recent weeks even as debate heated up over what sort of budget cuts to attach to an increase in the federal debt ceiling. Senate Minority Leader Mitch McConnell, a Kentucky Republican, has repeatedly said he believes that the group led by Biden is more likely than the six senators to agree on a deficit-reduction plan. That group began meeting this month.
August Deadline
The Treasury Department has said it will run out of options for avoiding a government default of its debts by Aug. 2. Many lawmakers say the debt-limit vote will be their best chance this year to force significant changes in government spending.
Crapo disagreed, saying there is no “magic date by which everything evaporates if we haven’t made a deal by that point.”
Coburn was a member of the administration’s debt commission and surprised many of his colleagues last year when he endorsed recommendations by the panel’s leaders -- Democrat Erskine Bowles and Republican Alan Simpson -- that included increased taxes. While the full panel ultimately failed to endorse the recommendations, they formed the basis of the Gang of Six talks.
Coburn was criticized by Americans for Tax Reform, an advocacy group in Washington, which accused him of reneging on promises to oppose tax increases. Yesterday he said that “the only way we get out of this problem is increase the revenues to the federal government.”
The Bowles-Simpson plan would have overhauled the tax code, cutting rates while junking individual tax breaks and imposing big cuts in spending in entitlement and other government programs. Its goal was to slash about $4 trillion over a decade from the nation’s deficits.
--With assistance from Heidi Przybyla, Kathleen Hunter and Peter Cook in Washington. Editors: Don Frederick, Leslie Hoffecker
To contact the reporters on this story: Brian Faler in Washington at bfaler@bloomberg.net; Julie Hirschfeld Davis in Washington at jdavis159@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
