Associated Press, Published May 03 2011
Senate Democrats eye $4T budget savings plan
Budget Committee Chairman Kent Conrad, D-N.D., said the plan calls for a complete overhaul of the tax code — stripping out numerous tax write-offs while lowering income tax rates — but would leave Social Security untouched. The tax reform idea would generate an overall revenue increase in the range of perhaps $1 trillion over the coming decade.
Conrad briefed his Democratic colleagues on the draft plan, which under Capitol Hill's arcane budget process is a blueprint setting a nonbinding framework for future legislation. The measure could come up for a committee vote next week, Conrad said.
The Senate Democratic plan would offer a counterpoint to a House GOP budget plan that passed last month. The GOP measure calls for a dramatic overhaul of Medicare that, for future retirees now 54 years old or younger, would turn the popular elderly health care program into a voucher-like system in which beneficiaries would purchase health insurance.
Conrad is also part of a so-called Gang of Six senators working on a separate track to devise a stronger plan that would seek to force Congress to pass deficit-slashing legislation. The group is struggling to reach agreement on a complicated measure that set targets for spending cuts and tax increases that would be enforced by automatic spending cuts and tax increases if Congress is unable to meet them.
The various maneuvering on the budget comes as out-of-control deficits presently force the government to borrow more than 40 cents of every dollar it spends — and Congress confronts a wrenching vote to permit the government to borrow even more that the $14.3 trillion of already-accumulated federal debt. Lawmakers in both parties promise that measure will be accompanied by spending cuts.
Vice President Joe Biden is hosting a meeting on Thursday with a bipartisan group of House and Senate lawmakers in hopes of working towards agreement on the budget. But the common wisdom is that the panel's discussions may not bear much fruit since the panel is stocked with partisan loyalists from both political parties.
Conrad had little specific to say about either his Tuesday proposal or the secretive work of the Gang of Six. But he says both emulate the work of the bipartisan budget commission on which he served. Conrad voted for the commission's plan, which blended cuts to defense and domestic programs with an increase in the gas tax and $1 trillion in new revenues flowing from a radical tax overhaul.
"What I am laying out borrows heavily from the fiscal commission," Conrad told reporters.
It's debatable at best whether the Democratic-controlled Senate and the GOP-dominated House can come to agreement on a budget resolution. Conrad's call for higher taxes is a non-starter with tea party-backed House Republicans while Democrats have launched an assault on the House-backed overhaul or Medicare, which would call for replacing the current system in which the government directly pays doctor and hospital bills with subsidies of private insurance whose purchasing power erodes over time.
"There are modest savings out of Medicare," Conrad said of his plan discussed on Tuesday.
Copyright 2011 The Associated Press.