Wednesday, April 20, 2011

Congress mulls over "club in the closet" budget solution

Proposals being circulated among the bipartisan “Gang of Six” Senate negotiators, and about 20 other lawmakers in both chambers, would set deficit-cutting targets, according to people familiar with the plan. They would impose automatic, across-the- board spending reductions and higher taxes if Congress failed to meet the goals.

Such plans -- dubbed save-as-you-go, or Savego in one version -- contrast with the immediate spending cuts House Republican freshmen are demanding.

“The enforcement mechanism is key to striking a deal,” said Bob Bixby, executive director of the Concord Coalition, a group that promotes balanced budgets. That’s because Republicans are worried Democrats will never accept entitlement-benefit cuts, while Democrats doubt that Republicans would agree to tax increases, he said.