Gang of Six proposal led to collapse of debt ceiling talks

LA Times:

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The Republicans made an offer: between $3 trillion and $3.5 trillion in spending reductions, and nearly $800 billion in revenue increases over 10 years through overhauling the tax code. Geithner and Daley took it back to the White House.

On Sunday, Boehner and Cantor were invited to the White House for a private, unannounced meeting with Geithner, Daley and Jacob Lew, the director of the White House Office of Management and Budget. Obama, who was at church that morning, popped in a couple of times.

The White House was agreeable to parts of the deal — notably, the proposal for nearly $800 billion in added tax revenue.

"They were willing to accept our number," the GOP aide said. The group also talked about overhauling the tax code.


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The next day, however, a bipartisan group of senators referred to as the Gang of Six unveiled its own deficit reduction proposal that included more than $1 trillion in tax revenue.

According to the Republicans, that proposal changed the debate. Later Tuesday, the White House said it needed to see an additional $400 billion in new tax revenue, aligning it more closely with the goals in the Gang of Six proposal.

"They indicated that changed the dynamics of what they could do," the GOP aide said.

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It was the extra $400 billion that broke the camel's back for this deal. Greedy Democrats just could not say yes to a deal the Republicans had proposed.