Washington - AFP
A quarter of the $3.7 trillion in U.S. deficit cuts offered in an 11th-hour bipartisan budget proposal would come from new taxes, Senate backers said. The $962 billion in new taxes -- 26 percent of the proposed deficit reduction over 10 years -- would combine with $2.74 trillion in spending cuts, 74 percent of the reduction, the so-called Gang of Six senators said. The proposal, which received immediate support from President Barack Obama and from 43 senators from both parties, would impose spending cuts and caps, and make Social Security changes intended to make the program solvent over 75 years, a four-page proposal outline indicated. It calls for $500 billion in immediate savings and would have congressional committees cut agency spending in their areas of jurisdiction, overhaul so-called entitlement programs such as Medicare and Medicaid, and lower personal and corporate tax rates, eliminating the unpopular Alternative Minimum Tax and many deductions, exemptions and credits. These changes, modeled on recommendations considered last year by a bipartisan Fiscal Responsibility and Reform commission Obama established, would generate more than $1 trillion in fresh revenue, the proposing senators said. House Majority Leader Eric Cantor, R-Va., a vocal opponent to any plan with tax increases, said in a statement the proposal did \"seem to include some constructive ideas to deal with our debt,\" but did not endorse it. A spokesman for House Speaker John Boehner, R-Ohio, said, \"This plan shares many similarities with the framework the speaker discussed with the president, but also appears to fall short in some important areas.\" Senate Majority Leader Harry Reid, D-Nev., invited the bill\'s supporters to suggest elements that might be included in the so-called Plan B debt-reduction framework he and Senate Minority Leader Mitch McConnell, R-Ky., were crafting. McConnell said he hadn\'t \"had a chance to decide how I feel\" about the proposal. Plan B is meeting stiff opposition from House Republicans, The Wall Street Journal reported. The Treasury Department says the federal government will run out of cash to pay all its bills Aug. 2 unless the $14.3 trillion government borrowing authority is increased. The Gang of Six proposal is very unlikely to be converted into legislation that could be passed before Aug. 2, lawmakers said, but they said some elements could be incorporated into a final deal to shrink the deficit and raise the federal debt cap by the deadline. Obama summoned congressional leaders back to the White House Wednesday to \"start talking turkey\" about a compromise package that could pass by Aug. 2. The developments come as a public-opinion poll indicated 38 percent of Americans now say the debt ceiling should be raised, while 31 percent say it shouldn\'t. A month ago, the Wall Street Journal/NBC News poll found 39 percent opposed raising the ceiling and 28 percent favored it. The poll also found 58 percent said they supported Obama\'s deficit-reduction approach, which includes tax increases, while 36 percent said they backed the leading Republican proposal to cut federal spending but hold the line on taxes. The poll of 1,000 adults, taken July 14-17, has a 3.1 percent margin of error. Separately, a conservative budget-balancing plan passed the House late Tuesday 234-190. The bill was expected to be voted on in the Senate within a couple of days, but was given virtually no chance of passing. Obama has promised to veto the bill if it reaches his desk.