July 19, 2011— -- President Obama says a deficit-reduction proposal unveiled today by a bipartisan group of seven senators is "good news" in the ongoing showdown over the debt limit, and may signal a path to compromise.
"I think is a very significant step," Obama told reporters in the White House briefing room. "The framework they put forward is broadly consistent with what we've been working on at the White House."
The proposal calls for both cuts to entitlement programs and tax increases, a two-pronged approach the president has advocated as part of a "grand bargain." Read more about the group of senators called the 'Gang of Six'.
The senators' plan calls for a $500 billion down payment on reducing the deficit and moves toward a $3.7 trillion goal. It would increase tax revenues by $1 trillion through closure of a variety of special tax breaks and havens, but would amount to a net tax decrease of $1. 5 trillion because the Alternative Minimum Tax would be repealed.
Seventy-four percent of the deficit reduction would come from spending cuts and 26 percent would come from higher revenues. There would be cuts to Medicare under the plan, which also creates a Congressional committees to overhaul Social Security.
"We've got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something," Obama said.
The president stopped short of a complete endorsement of the plan since, he said, "we just received it." But, he said it offers "the potential for bipartisan consensus."
"We're in the 11th hour and we don't have a lot of time left," Obama said, adding that his team would study the plan and that he would urge congressional leaders to start negotiating based on its framework.
Obama said the McConnell-Reid proposal would continue to be a "fail safe" option to raise the debt ceiling by Aug. 2 in the event that no broader deal can be reached.
ABC News' Sunlen Miller contributed to this report.