Erik Burgess, Published December 06 2012
Sen. Conrad says he could fix fiscal cliff in about 20 minutes
“It’s amazing at how easy it is to do, actually, if you have no one that you have to persuade but yourself,” the retiring senator quipped in a Forum Editorial Board meeting Thursday.
Unless Congress and President Barack Obama act before Jan. 1, federal budget cuts and more than $500 billion in tax increases kick in, possibly hurling the U.S. back into recession.
Conrad, a 26-year veteran of the Senate whose last day in office is Jan. 3, said he believes negotiations are actually close, but 24-hour media coverage is deterring from constructive conversations about the budget.
“Part of the problem is you’ve got these dueling press conferences,” he said. “It makes people appear further apart than, behind the scenes, they are really at this point.”
But politics-as-usual has gotten in the way of sealing a deal, Conrad said.
House Speaker John Boehner, R-Ohio, and Obama are both willing to make a deal, Conrad said, even if it means going against their own political parties. But Boehner could be getting heat from his party’s right wing, making him appear more reluctant.
“He’s looking over his shoulder, and he’s got about 100 members who will go south on him, which threatens his speakership,” Conrad said. “That’s a tough deal to be in.”
Another political technicality has muddied the waters, Conrad said.
If a deal is made before Jan. 1, it will appear as if Congress has agreed to tax hikes, because Bush-era tax cuts are still in place, and any change to those will look like an increase. If a deal is made after Jan. 1, those Bush tax cuts will have completely gone away, so any changes would look like more cuts.
It’s a problem that’s struck the Republican base, Conrad said, who is trying to maintain their pledge of keeping taxes down.
“I’ve had very serious Republican senators come to me quietly and say ‘You’ve got to get past Jan. 1 so all of this scores as a tax cut,’ ” said Conrad, who is chairman of the Senate Budget Committee.
In his 20-minute fiscal cliff remedy, which he sketched out like a school child’s arithmetic problem on a half sheet of paper, Conrad took a bipartisan approach. He used Obama’s plan on the revenue side and Republicans’ on spending cuts, with some “minor modifications,” he said.
He’s proposing a total of $500 billion in health care cuts – the Republicans proposed $650 billion – and Conrad made further cuts to those that were already passed in the Budget Control Act of 2011, the deal cut in the face of the debt-limit debate last year that put in place the fiscal cliff’s broad automatic budget cuts
Conrad said his “20-minute” plan would save $4.3 trillion.
“That would do the job,” he said. “It’s really both sides going big. And if we do that, we put the country on a very firm footing going forward.”
Conrad noted further that when large cuts are being discussed, they are often not put into perspective for the public. For example, his $500 billion in health care cuts across the next ten years is equivalent to just four percent of the $11 to $12 trillion health care budget over the decade.
The same applies for defense spending, from which he would like to cut $150 billion, or three percent of the $5 trillion to be spent over the next five years.
“Of course they scream that you can’t take another nickel, but the truth is, you can,” Conrad said.
Still, Conrad is almost certain a deal will happen.
“I’m quite confident of that. But it’s going to take some courage,” he said.
Readers can reach Forum reporter Erik Burgess at (701) 241-5518