With growing concern that debt negotiations ahead of a debt ceiling increase are not likely to result in a large enough deficit decrease to stave off calamitous consequences in the markets, a bipartisan group of more than 50 senators gathered Tuesday morning for more than an hour to see if they could embrace a $3.7 trillion deficit reduction plan ahead of the Treasury-assigned August 2 default deadline.
Bounding out of the meeting, Sen. Tom Coburn, R-Okla., who took a sabbatical from the so-called bipartisan Gang of Six, which negotiated the yet-to-be-finished compromise, to deliver the news - he had returned to the table. "It's back," he said cheerfully of the gang.
"The plan has moved significantly. It's where we need to be," Coburn added, just one day after presenting his own plan to reduce the debt by a whopping $9 trillion, a plan he hopes will serve as a menu of options from which members can choose down the road to stem the tide of red ink.
What got the fiscal hawk senator, a pivotal gang member critical to GOP support, back to the table?
"We added $116 billion in health care-related savings," said Sen. Kent Conrad, D-ND, another member of the group, in reference to entitlement reform. Conrad said "the committees of jurisdiction" would determine exactly where the savings would come from. If that did not work, Conrad said, the group would have a provision whereby 10 senators could come forward with an amendment to make the necessary changes.
One after another, senators emerged from the first floor Senate meeting room to praise the plan, some signing on right away, others determined to get to "yes."
"I said, 'Sign me up', and I wasn't alone," Sen. Joe Lieberman, I-Conn, said.
"This is a very thoughtful, serious plan...I'm excited...This is the vehicle that gives us the best opportunity to get at a whole range of issues," said Sen. Mike Johanns, R-Neb.
Sen. Susan Collins, R-Maine, said she was "very encouraged," and said she would be "reviewing the details." The centrist Republican voiced the mood of many leaving the room, saying, "More than 50 senators went in and out of the room. Everyone felt a sense of relief."
The plan raises about $1 trillion in revenue through closing loopholes and ending tax breaks, with some of it used for deficit reduction and most used for rate reduction through tax reform. As it would take time to enact such changes, the plan calls for an immediate $500 billion in spending cuts, something both Conrad and Coburn called "a downpayment."
And though the plan would likely anger many Republicans and outside anti-tax groups, members were quick to note that though some revenue would be used for deficit reduction, because they do away with the Alternative Minimum Tax (AMT), among other measures, the plan would represent, in total, a "1.5 trillion tax cut," according to Conrad.
Members of the Gang of Six may be more likely to take a chance on a politically unpopular solution. The only senator in the group who is up for reelection in 2012 is Conrad, and he has announced he won't run again.
It is unclear if the group can act before August 2, before a fallback plan comes forward from Senate leadership that could allow the President to increase the debt ceiling by $2.4 trillion with no spending cuts, though the plan would try to at least get $1.5 trillion in spending cuts approved.
But it was clear, the preference is to have this plan, not the leadership plan.
Several senators who were in the room predicted that there would be the necessary votes, 60, to stave off a filibuster.
Sen. Kay Bailey Hutchison, R-Texas, said she "absolutely" supports the plan, and added, "They have come up with a plan that will get a majority vote, very likely 60 votes."
The newly-installed Coburn was even more certain, "In the next 24 hours, 60 senators will sign on."
But - and there's always a but - this is not a done deal. Aides to Gang members say they've still got a ways to go.
The group plans to meet again later today and gave their colleagues 24 hours to determine if they will support the plan.
Sen. Joe Manchin, D-W.Va., released a statement that stopped just short of supporting the plan, though the moderate Democrat said he's still reviewing it. "This morning, the Gang of Six truly became a Mob of Fifty, and I believe this proposal holds enormous promise as a commonsense solution to our long-term debt and deficit.
SEE THE ENTIRE GROUP OF SIX PROPOSAL BELOW