Economy USA

Obama supports the bipartisan plan on U.S. debt

WASHINGTON (Reuters) –On Tuesday Barack Obama backed a new plan for deficit reduction proposed by a group made up of Senate Democrats and Republicans to avoid the U.S. repayment requirements on their debts.

The President of the United States considered that the proposal of the group of senators, “Gang of Six”, was likely to provide new ideas to unblock negotiations in Congress on increasing the debt ceiling on August 2.

The head of the White House, the Senate proposal is broadly in its position on reducing debt and deficits.

He asked the leader of the Democratic majority in the Senate, Harry Reid and Senate Republican leader, Mitch McConnell, to begin to discuss seriously.

“I hope they will be ready tomorrow to start talking seriously and really get to work to make a plan that can be ready in time for the deadline of August 2,” said Barack Obama.

The first reaction was positive in the Republican camp, said John McCain Republican Senator after a closed-door meeting of senators from the opposition.

Mitch McConnell said on the other hand not being ready to give an opinion, stating that he intended to study the proposals of the group.

Mitch McConnell for his part in the origin of a “plan B” which aims to avoid an immediate lowering of the triple A rating from the United States. This plan is less ambitious than the “Gang of Six” as is saving measures than 1,500 billion.

This plan does not necessarily prevent a negative outlook on the rating of the United States, said Moody’s.

A negative outlook could result in a lowering of note within 12 to 18 months.
The chairman of the Senate Budget Committee, Kent Conrad, one of six senators from the “band” working on reducing the deficit since December, said that their plan was 3750 billion dollars in savings over ten years with 1200 billion dollars in new revenue and 1,500 billion in tax breaks that could be found via a tax reform.

The group discussed his proposals with fifty senators, half the Senate. “The response was very positive,” said Kent Conrad to the press.

The “Gang of Six” has asked other senators to take 24 hours to study the plan and then share their reactions.

The plan includes imposing an immediate deficit of 500 billion, reduce spending ten years in the ceiling and operate more efficient social protection programs Medicare and Medicaid.

Asked whether the plan could become part of urgent negotiations that link deficit reduction to raising the U.S. government’s borrowing authority by August 2, Conrad said: “Could the two get married? Could they get combined at some point? I’m sure that’s possible.”

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