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    July 20, 2011

Obama: 'Gang of Six' Plan is Balanced Approach to Deficit Reduction

   VOA News
   President Barack Obama discusses the continuing budget talks in the
   briefing room of the White House in Washington, July 19, 2011
   Photo: AP
   President Barack Obama discusses the continuing budget talks in the
   briefing room of the White House in Washington, July 19, 2011

   U.S. President Barack Obama is urging Republican and Democratic
   lawmakers to continue searching Wednesday for a last-minute compromise
   on a budget deal tied to raising the nation's borrowing limit.

   Breakthrough?
   A possible breakthrough emerged on Tuesday when a bipartisan group of
   senators known as the "Group of Six" unveiled a deficit reduction plan
   that calls for an immediate $500 billion in spending cuts as part of a
   larger effort to slash spending by $4 trillion over the next decade.
   It also would make significant changes to major social welfare programs
   like Medicare and raise $1 trillion in tax revenues over 10 years.
   On Tuesday, President Obama called the plan "a balanced approach" to
   deficit reduction, although he did not specifically endorse it. The
   president did, however, encourage lawmakers to turn the plan into a
   bill that could be voted on as soon as possible.

   US Debt

   Republican reaction
   Meanwhile, Republican House Majority Leader Eric Cantor said the "Gang
   of Six" plan contained some good ideas.
   The Republican-controlled House of Representatives on Tuesday approved
   a plan to raise the debt ceiling in exchange for cutting more than $100
   billion from the federal budget next year. The so-called Cut, Cap and
   Balance Act would cut non-defense federal spending, limit future
   spending and require a constitutional mandate for a balanced federal
   budget.
   What's next?
   Only five Democrats voted for the bill, which is expected to face
   defeat in the Senate. President Obama has also said that he would veto
   the bill.
   If lawmakers can not agree on a deal to raise the nation's $14.3
   trillion debt ceiling by August 2, the U.S. could potentially default
   on its loans and face a possible decreased credit rating.

   Democratic Senate Majority Leader Harry Reid continues to hold talks
   with Republican Senate Minority Leader Mitch McConnell on McConnell's
   proposal to give the president sole authority to raise the debt limit
   by $2.5 trillion in three installments over the next year. Obama has
   characterized that plan as a fail-safe.

   Some information for this report was provided by AP and Reuters.

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