This article about the Senate's Gang of Six deficit-reduction talks incorrectly described Sen. Mitch McConnell (R-Ky.) as the Senate majority leader. He is the minority leader. The article also incorrectly identified Carmen Reinhart as a University of Maryland economist. Reinhart, no longer affiliated with the university, is a senior fellow at the Peterson Institute for International Economics.
'Gang of 6' senators launch public campaign to support deficit reduction
Tuesday, March 8, 2011; 12:43 AM
RICHMOND - While Washington bickers noisily over cutting a small slice of the federal budget, Sens. Mark Warner, a Virginia Democrat, and Saxby Chambliss, a Georgia Republican, launched a campaign Monday to convince the public that merely cutting spending will do little to tame the $14 trillion national debt.
The nation will be "up the creek" economically, Warner told a crowd of more than 200 lobbyists and business leaders in Richmond, unless Congress and the White House come together in support of highly unpopular measures such as raising taxes and overhauling Social Security and Medicare.
Even as congressional debate in recent years has been crippled by partisan rancor, Warner and Chambliss have entered quiet talks with four other senators from both parties in hopes of forging a compromise that could lead toward a more affordable government.
The town hall meeting was part of an emerging effort to build support beyond the Beltway for possible steps that have so far been deemed politically suicidal, such as asking business owners to give up tax breaks and workers to put off retirement until age 69.
"Everything is on the table," Chambliss said. "For a Republican to put revenues on the table is significant. For a Democrat to put entitlements on the table is significant. But Mark and I believe and know in our hearts that the only way we're going to solve this problem is to have a dialogue about these issues."
The group, which has taken to calling itself the Gang of Six, includes some of the Senate's most influential members, men with close ties to President Obama and GOP congressional leaders.
In addition to Chambliss and Sen. Tom Coburn (R-Okla.), who are personal friends of House Speaker John A. Boehner (R-Ohio), the Gang of Six includes Sen. Mike Crapo (R-Idaho), a close adviser to Senate Majority Leader Mitch McConnell (R-Ky.); Kent Conrad (D-N.D.), the chairman of the Senate Budget Committee; and Richard J. Durbin (D-Ill.), the No. 2 Democrat in the Senate and a close Obama ally. Warner is the former governor who famously balanced the Virginia budget.
The payoff for their efforts, the senators say, would be a more prosperous economy - and a reduced threat that the United States would face the kind of debt crisis that has sparked painful reforms in Greece and some other European countries.
"The picture needs to be painted for the American people that change is coming," Coburn said. "The question is, are we going to have it in a concerted, planned-out manner? Or are we going to have it in a firestorm?"
The group has been meeting weekly, while about 30 other senators are watching from the sidelines to see whether the talks produce a politically viable deficit-reduction plan they can back. Supporters include Senate veterans such as Lamar Alexander (R-Tenn.) and newcomers such as Amy Klobuchar (D-Minn.), a freshman facing her first reelection campaign next year. Klobuchar called the Gang of Six "an island of rationality" in a sea of denial about the nation's fiscal problems.
"We have a significant number of people that really are interested in doing the right thing," she said. "And we still have not given up hope that we can do this."
Klobuchar helped launch the deficit-reduction effort about a year ago, when Obama was pushing Congress to increase the legal limit on government borrowing. She and 13 other senators, led by Conrad and Judd Gregg (R-N.H.), withheld their votes and demanded that Obama create a commission to tackle the problem.
Republicans - and some Democrats - scorned the panel, dismissing it as a gimmick intended to give Democrats a talking point for the midterm elections. But when the panel started meeting, the urgency of the task quickly became apparent.
Several commission members pointed to the testimony of University of Maryland economist Carmen Reinhart in late May as particularly compelling. Reinhart and her co-author, Harvard economist Kenneth Rogoff, analyzed more than 200 years of data on 44 countries and found that "growth deteriorates markedly" when total government debt exceeds 90 percent of the economy. Total U.S. government debt exceeded 90 percent of gross domestic product last year.
"We are there. We're not approaching it," Crapo said in an interview. "You used to hear politicians say we can't keep piling this debt on our children and grandchildren. Well, it's not our children and grandchildren we're talking about alone anymore. It's everyone in America today. We do not have any time left for gridlock."
Last summer, Warner was coming to the same conclusion. Though new to the Senate, he was determined to work closely with Republicans to advance legislation. He reached out to Chambliss, one of the Senate's most conservative members, with whom he shared friends in the Atlanta business community.
The pair staged a series of educational sessions for Senate moderates, slowly expanding the circle of support. In January, after 11 of 18 members of the fiscal commission voted to endorse an ambitious plan to cut annual deficits by $4 trillion by 2020, Warner and Chambliss approached Durbin, Conrad, Crapo and Coburn - all commission members - and suggested that they continue the panel's work with the goal of forcing debate in the Senate.
The effort faces hurdles, including a wary White House and a Republican House majority that includes a large contingent of ardent conservatives.
The initiative has also attracted fierce critics, including Grover Norquist, a Republican anti-tax strategist who publicly accused Chambliss, Coburn and Crapo of abandoning their pledge not to raise taxes by lending support to the notion that the government could increase total tax revenue by closing loopholes and lowering income tax rates.
The three just as publicly dismissed the charge.
"None of us have ever voted for a tax increase, and I don't intend to," Chambliss said Monday. But the tax system is "way out of kilter," producing $1.1 trillion in revenue in 2009 while giving away $1.6 trillion in deductions and other breaks, he added. "We can do it in a fair and reasonable way and . . . actually lower rates and at the same time raise revenues."
At the same time, the effort is also attracting strong supporters. This week, Erskine Bowles and Alan Simpson, the leaders of Obama's fiscal commission, are launching their own campaign to promote the Gang of Six talks. And despite reluctance at the White House to engage publicly on the issue, Bowles said in an interview that the president has named Vice President Biden as his "point guy" on the talks.
"I think they're moving in this direction," Bowles said of White House officials. If the Senate can establish a strong base of support, he said, "there's going to be movement to the center to get something done."
Warner said that, at first, "the conventional wisdom in Washington was this was kind of Quixote-esque." Now? "I'm not sure people are betting on us yet," he said. But a growing number of senators "are realizing that this might be a moment in time.''