Two senators promise 2011 deficit-cutting bill

WASHINGTON (Reuters) - Two senators pledged on Monday to offer bipartisan legislation next year that reflected proposals to slash the federal budget deficit submitted this month by a presidential commission.

"Taking the commission's report ... we'll be introducing that as legislation, a legislative vehicle, next year, recognizing in the process that a lot of that would be subject to change," Democratic Senator Mark Warner said.

He was joined on a conference call with reporters by Republican Senator Saxby Chambliss, who said the two are working together on the project. It would face an uphill political climb next year, despite wide agreement in Congress the yawning deficit must be dealt with soon.

A commission established by President Barack Obama released a plan earlier this month to overhaul the tax code by eliminating or narrowing many tax breaks and cutting the deficit by nearly $4 trillion over the next decade.

The Bowles-Simpson plan -- named for panel co-chairmen Erskine Bowles and Alan Simpson -- failed to win the support of 14 of the 18 commission members needed to trigger congressional action on it. But 11 members backed it, more than expected.

Warner and Chambliss led a discussion last week among more than a dozen Democrats and Republicans on the Senate floor about the $1.3 trillion deficit for fiscal 2011. Warner said then that it was time for the Senate "to put up or shut up" on the issue.

He said on the conference call that key goals will be both deficit reduction and tax reform that reduces business taxes and simplifies income taxes, while making them more progressive.

Chambliss said on the call that an impending vote in Congress to raise the government's debt ceiling -- expected to be needed in the first or second quarter of 2011 -- will be an important turning point.

"It gives us a deadline to look to from the standpoint of getting some meaningful decisions made ... If we can use that as leverage that's an ideal scenario," Chambliss said.

Congress last week approved an $858-billion tax-cut deal that added greatly to the deficit but included means whereby Americans could use taxes saved to stimulate the sluggish economy.

"You've got to allow the economy to recover before some of these (deficit-reduction) items would kick in," Warner said.

"We're going to need active involvement of the (Obama) administration ... (and) the business community, he added.

(Editing by Philip Barbara)