After Gang of Six dissolution, eyes turn to Biden deficit talks

Sen. Tom Coburn’s (R-Okla.) exit from the bipartisan Gang of Six budget talks has left hopes for a grand deficit-reduction deal in tatters.

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All eyes are now on the debt talks being conducted by Vice President Joe Biden, but those efforts are not expected to result in anything more than a piecemeal approach to cutting the deficit.

Senators and budget experts said the Biden talks on raising the debt ceiling are not capable of producing the kind of grand bargain the Gang was discussing: tax and entitlement reform paired with discretionary and mandatory spending cuts and caps.

Biden himself has said he is only looking for a “down payment” on deficit reduction in order to get all sides to raise the nation’s debt ceiling by Aug. 2.

Sen. Jon Kyl (R-Ariz.), a member of the Biden talks, made clear the negotiations are about finding a limited agreement for raising the federal borrowing limit.

Whereas the Gang was discussing things like overhauling the tax code, “we are not going to have time to do all of that in the relatively short time the debt ceiling has to be acted upon,” Kyl said.

Coburn’s participation in the Gang of Six opened up the possibility that Republicans and Democrats might make painful concessions on tax increases and entitlement cuts to reach a comprehensive framework for deficit reduction.

But Coburn’s abrupt decision Tuesday to drop out of the talks, which he said had reached an unproductive “impasse,” might have dealt a fatal blow to those aspirations.

“I viewed it as the only game in town,” Concord Coalition Executive Director Bob Bixby said of the Gang. “[What] the Biden group will come up with is something just to get over the debt limit.”

He said given the Aug. 2 timeframe there is “no way” the Biden group can agree on tax or Medicare reform.

Steve Bell, a former Republican Senate Budget Committee staffer now with the Bipartisan Policy Center, said the outlook is grim for any real deficit fix.

“I think it means fiscal deadlock just like last year, continuing resolutions, short-term extensions of debt ceiling,” Bell said.

Coburn’s office said Senate Minority Leader Mitch McConnell (R-Ky.) did not pressure the senator to leave the talks.

Coburn on Wednesday said he is on “sabbatical” from the gang.

Bell said Coburn’s move shows “the limits in bipartisanship are what kind of changes do you make in Medicare.” Coburn had been seeking cuts to entitlements that Democrats found unacceptable.

Coburn was also facing pressure from the right. Anti-tax advocate Grover Norquist was adamant that Republicans in the Gang must not agree to any tax increases as part of a budget deal.

Some are still holding out hope that the remaining Gang of Five can reach an agreement. The other lawmakers in the group went back to work Wednesday afternoon.

“We’re looking to make more progress,” said Sen. Mark Warner (D-Va.), a member of the Gang.
Maya MacGuineas, of the Center for a Responsible Federal Budget, has been advising the group and said it’s possible Coburn could come back to the table.

“I could see the Gang getting back together,” she said.

But Sen. Mike Crapo (R-Idaho), a member of the Gang, said it would be difficult to move forward without Coburn, who had been seen as the key conservative participant.

“We still have to assess just what the opportunities are right now — to see what Sen. Coburn’s long-range decision is,” Crapo said. “I mean, what he said was that he’s going to take a break.”

A spokesman for Coburn said the senator plans to present his own vision for cutting the deficit by $9 trillion.

The spokesman said nothing would be off limits and that the plan would address entitlements, defense, tax earmarks, discretionary spending and other issues.

The difficulty of finding big solutions to the deficit is compounded by disagreements on the draft Senate budget resolution that is being worked on by Sen. Kent Conrad (D-N.D.).

Democrats still have no counteroffer to the House-passed budget authored by Rep. Paul Ryan (R-Wis.), despite their scathing attacks on it.

Sources said it is a real possibility that Conrad does not move a budget this year due to disagreements among Democrats about what level of tax increases to include.

“The Budget Committee is more than likely going to have some sort of budget at some point,” Sen. Mark Begich (D-Alaska), a member of the committee, said. He could not say if it would be this month. “It might be a broad sweep. It might not be all the depth that people want.”

But Budget Committee member Sen. Bernie Sanders (I-Vt.) said a budget would not move unless it requires “shared sacrifice” by the wealthy.

“I think the millionaires surtax makes eminent sense. I also was favorably disposed to the fact that Sen. Conrad moved toward a 50-50 situation of spending cuts and tax increases,” he said.

Sanders greeted Coburn’s exit from the Gang with some satisfaction.

“I was not a fan of the Gang of Six. The direction that I understand they were going in, which may have included cuts in Social Security, was the wrong direction,” he said.

Some centrists in the Senate were left dispirited by the Gang’s stalemate.

“There was a lot of pressure being exerted on Tom Coburn about his willingness to look at tax expenditures,” Sen. Claire McCaskill (D-Mo.) said. “I think there is way too much pressure on our side of the aisle about mentioning the word ‘Social Security’ or talking about means-testing Medicare.

“I feel for him. I take shots from the far left and the far right almost every day,” said McCaskill, who is facing a tough run for reelection in 2012.

“I know one thing for sure: Winning elections and solving problems are like oil and water around this place,” she added. “I think Mitch McConnell is focused on winning elections. And quite frankly, some in my party are just focused on that.”

Sen. Olympia Snowe (R-Maine) had tried to formulate a bipartisan healthcare compromise in 2009 with another Senate gang of six. She was asked about Coburn stepping away from the latest incarnation.

“I’ve been in gangs before,” she said, shaking her head.