Sen. Warner Discusses What's In The Gang Of Six Plan

Robert Siegel talks to Virginia Democratic Sen. Mark Warner about the Gang of Six's bipartisan deficit reduction proposal.

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MICHELE NORRIS, Host:

From NPR News, this is All Things Considered. I'm Michele Norris.

ROBERT SIEGEL, Host:

And I'm Robert Siegel.

Just when it seemed lawmakers had abandoned all hope of a grand bargain on slashing the nation's debt, the Gang of Six is back and it has a plan. The three Democrats and three Republicans met today with nearly 50 of their Senate colleagues to say they had agreed on a package. Senator Tom Colburn, Republican of Oklahoma, also returned to that group after dropping out in May. President Obama weighed in, saying it might be the way to resolve the debt ceiling crisis.

BARACK OBAMA: I want to congratulate the Gang of Six for coming up with a plan that I think is balanced. We just received it, so we haven't reviewed all the details of it. It would not match perfectly with some of the approaches that we've taken, but I think that we're in the same playing field.

SIEGEL: For more on exactly what's in this plan, I'm joined now by one of the Gang of Six, Senator Mark Warner, Democrat of Virginia. Welcome to the program, senator.

MARK WARNER: Thanks, Robert.

SIEGEL: According to an executive summary of the plan that I'm trying to understand, on the tax - on the revenue side, it says on the one hand that the Congressional Budget Office would score this plan as tax relief of approximately one-and-a-half trillion dollars. On the other hand, it speaks of raising an additional $1 trillion in revenue. What is this? Is it a tax increase? Is it a tax decrease? Is it tax neutral?

WARNER: Well, it's actually a tax reform plan and we've taken the framework of the Simpson-Bowles approach, the president's deficit commission, that said if we are willing to be bold with tax expenditures, tax loopholes, tax deductions and cut them back fairly dramatically, we can actually lower rates and still generate additional revenues for deficit reduction.

For example - and I was a governor before being senator and I was a business guy - you know, federal government accounting is a little bit screwy. One of the things that we get rid of is the alternative minimum tax, the so-called AMT, which over a 10-year period saves 1.7 trillion, yet each year we patch it. So the fact that we get rid of it does save us money, counts as a tax relief, but you can score it different ways based upon different baselines.

That's pretty much gobbledy-gook to most of our listeners, but there - let me assure you that this has been a plan that has been vetted for months in terms of the framework of Simpson-Bowles.

SIEGEL: Well, let me cut to the chase. Did your Republican colleagues tell you that they think Republicans in the House can look at what you've done and say it squares with their view on taxes? They've been adamant on that.

WARNER: Well, I think they think it can because within the confines of certain pledges, because there are this tax reduction on things that, frankly, we don't pay for each year or we avoid actually following the law each year the way Congress does budgeting, you know, we can generate revenues and still make sure that - within the framework of some of these so-called pledges, I think it passes that muster.

SIEGEL: (unintelligible)

WARNER: At the end of the day, what the American people need to look at is - will our debt, the amount of money that we owe foreigners, and our investors and our own folks who own bonds, will we owe less debt 10 years from now if we have this plan? We will owe close to $4 trillion less debt than what we would owe if we do nothing. That's what the bottom line, as a former business guy, that's the way I'd look at this plan.

SIEGEL: One of cuts is eliminating the so-called Class Act, that's a provision of the new health care law that addresses at-home long term care. This was a favorite project of the late Senator Edward Kennedy. Are your fellow Democrats prepared to jettison that?

WARNER: Listen, there are a number of people who fought very hard for the Class Act. In concept, it makes sense. The problem with the aging of our population is to add a big new entitlement that for the first 10 years doesn't cost that much, but in the out years, really would be extraordinarily costly. We thought at this moment of tight deficits we couldn't promise folks this new entitlement if we couldn't pay for it 10 or 15 years from now, 20 years from now.

And I'm sure there will be some pushback. There's things in this plan for everybody to like, in terms of deficit reduction, but there's also things that everybody will dislike.

SIEGEL: That's a big Democratic give, that one, you're saying. What is this, by the way? It's not a bill. It must be umpteen bills. It calls upon the Senate Finance Committee to get to work on a tax reform. What exactly is it that would go to the Congress that somebody could vote on and President Obama could sign?

WARNER: Well, the first thing we've got to make sure is that we raise the debt limit. And with time so short, what we can't do - even though, I think this is a great plan - that we can jeopardize raising that debt limit. That would be catastrophic. A downgrade of our debt would be a tax increase on every American in terms of higher interest costs. So, that's got to be our first objective.

The second objective is actually having a process to reduce our debt by this close to $4 trillion. We break it into two steps, one bill that would make a down payment and set up the process on how we get the balance of this close to $4 trillion. This gives us a two-step plan that we've laid out, whether it can be implemented into legislative language in the 12 or 13 days we've got left, that's an open question. But we've sure as heck got enough support and this was bipartisan enough...

SIEGEL: In the Senate.

WARNER: ...and it's bold enough that I think it could gain some traction.

SIEGEL: Senator Warner, thank you very much.

WARNER: Thank you.

SIEGEL: Senator Mark Warner, Democrat of Virginia, one of the so-called Gang of Six.

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