President Obama is touting a bipartisan Senate budget plan to resolve the impasse over raising the federal debt limit before an August 2 deadline. The so-called Gang of Six senators have proposed immediate savings of $500 billion, an overhaul of Social Security and Medicare, as well as tax changes to generate some $1 trillion in revenue. While Democrats have previously backed raising taxes on wealthy households and corporations, the new bipartisan plan would raise government revenue by eliminating a number of popular tax breaks and deductions, including write-offs for home mortgage interest and employer-provided health benefits. Going further, the plan calls for using those savings to, in fact, lower taxes for the wealthy, with the top individual and corporate tax rates dropping from 35 percent to 29 percent. At the White House, President Obama said the plan provides a basis for ongoing talks.

President Obama: “We have a Democratic president and administration that is prepared to sign a tough package that includes both spending cuts, modifications to Social Security, Medicaid and Medicare that would strengthen those systems and allow them to move forward and would include a revenue component. We now have a bipartisan group of senators who agree with that balanced approach.”