Breakthrough in debt talks?

All of a sudden there's a $3.7 trillion deficit-reduction plan that's getting bipartisan support in the Senate and the encouragement of President Obama. The proposal revives recommendations made several months back by the Senate's "Gang of Six" (Democrats and Republicans), and would involve big spending cuts and an overhaul of Medicare and Social Security. But it also involves raising new revenue from closing tax breaks and lowering tax rates across the board. From the NYT:

The presentation on Tuesday marked the return to the group of Senator Tom Coburn, a conservative Republican of Oklahoma, two months after he abandoned the effort by two other Republicans and three Democrats to reach a deal, saying it would not cut spending enough. On Monday he had laid out his own $9 trillion debt-reduction plan, but acknowledged it could not be passed.

The Gang of Six presented its plan to fellow senators as the House prepared to vote on a Republican budget plan. The House bill, known as Cut, Cap and Balance, is a rejoinder of sorts to a plan hatched by the Senate Republican leader, Senator Mitch McConnell of Kentucky, that would allow Republicans to accede to an increase in the government's debt limit without actually voting for it.

Keep in mind that House Republicans have shown zero interest in revenue raising - and indeed are voting today on a nonsensical budget package that includes a balanced budget amendment. For what it's worth, the Dow, which has been up throughout the day, has been gaining more ground on news of the Senate proposal.