The Gang of Six plan proposal as currently written raises as many questions as it answers. The lack of a polished product should not surprise anyone. The documents were surely thrown together quickly reflecting a rapidly evolving process.
No doubt the authors’ first task will be to clarify the proposal. For example, by one reading the proposal suggests a tax increase/spending cut ratio of better than three-to-two. President Obama only suggested one-to-three, so the Gang of Six Plan suggests a curious negotiating style on the part of the Republicans. But let’s allow the details to come out before rendering final judgment.
The immediate question, however, is what the Gang intends to do with this plan. Shortly after its release, one of the authors, Senator Dick Durbin (D., Ill.), rushed out to assure everyone that there is no legislative language and none will be available until after August 2, when Treasury is supposed to run short on cash.
So what’s the point?
Do the senators propose to increase the debt ceiling sufficient to allow time for their plan to be finalized in legislative form? Do they understand they need up-front spending cuts equal to the amount of the debt-limit increase?
If their plan is to raise the debt limit by a large amount with the solemn promise to finish work on their plan later, they must be joking. Or they must think the American people are stupid. Who could be so naïve at this stage, to believe such a promise?
So to recap, the Gang of Six budget plan is to promise at a later date to pass legislation. And this legislation would (details forthcoming) cut some spending immediately, possibly raise some taxes immediately (though this is unclear), and then promise to raise taxes a lot more and cut spending a bit more in subsequent legislation. On its face and even with this vague outline, the substance of the plan is unacceptable. A massive tax hike to address massive overspending is a non-starter.
As a legislative ploy the plan is a promise multiplied by a promise at a time when the Senate has no credibility. The Senate has had since January to come up with a concrete proposal for immediate action. They failed. So, again, what’s the point?
— J. D. Foster is the Heritage Foundation’s Norman B. Ture senior fellow in the economics of fiscal policy.