Budget

Sen. Tom Coburn (R-Okla.) wants the U.S. military to improve its financial management practices, which he says could yield enough savings to ward off additional program cuts.

In a letter to the four military service chiefs, Coburn said he is worried about the nation’s “extraordinary challenge regarding to its fiscal health.” And he wants the Defense Department to help hoist the nation out of the fiscal ditch.

The Senate Finance Committee member urged the military chiefs to “aggressively pursue financial improvement and audit readiness in order to preserve the military's ability to take care of our troops today and to invest in the needed modernization of our weapon systems for the future.

"If done properly, this effort to improve your financial management will yield savings and prevent cuts to military personnel and programs which could occur otherwise,” states the letter.

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GOP plans to scale back federal spending will hinder economic recovery efforts, a senior Democrat warned. 

Sen. Claire McCaskill (D-Mo.) said Tuesday she won’t threaten to vote against raising the nation’s debt ceiling to force support for her new spending-cap bill.

"I am not willing to go there," she said, adding that it would be irresponsible to threaten a default on U.S. debt obligations.
 
Sen. Bob Corker (R-Tenn.), a co-sponsor, also said he was not looking to tie the bill to one raising the debt ceiling. He said he simply “hopes” it can be enacted before the $14.3 trillion debt limit is reached, likely by May.

Sen. Claire McCaskill (D-Mo.) said a new measure to limit spending was like good parenting on Tuesday, comparing legislation she was introducing with Sen. Bob Corker (R-Tenn.) to a parent’s response to a child that wants to borrow the car.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) at a Tuesday hearing said that his committee should aim to come up with a bipartisan deficit reduction plan by the time the nation’s debt ceiling is reached this spring.

A bipartisan group of 30 senators met early Tuesday morning to work on formulating such a plan.

A showdown between Republicans and the White House over raising the limit is expected to come in May. Conrad wants to turn the vote into an opportunity to strike a bipartisan deal on the long-term debt.

Conrad reiterated his call for a fiscal summit with the White House to come up with such a plan and reiterated that in the absence of such a summit, his committee would have to take the lead in crafting one.

Ranking member Sen. Jeff Sessions (R-Ala.) said that he is happy to join the effort. Committee member Sen. Ron Wyden (D-Ore.) said 30 senators had met at the request of Conrad Tuesday morning to work on a deficit plan.

Conrad has said that he would not vote to raise the nation’s $14.3 trillion debt limit unless there is a long-term deficit plan.

“What other committee is going to take this on?” he said. “It is very important that this be done before we get into a debate on the debt-limit extension.”

“We could lose credibility in the bond market if that has to be the leverage,” he added. “I don’t think we can wait for that.”

Tuesday’s Big Story:

With the House out of session this week, the Senate Budget Committee is set to kick off a string of four hearings in three days. First up, on Tuesday: the panel will hear about the state of the economy from witnesses from Morgan Stanley, among other places.  

Federal Reserve Chairman Ben Bernanke and Congressional Budget Office (CBO) Director Doug Elmendorf will testify next week before the House Budget Committee on the effects of the federal budget on the economy and jobs. 

Bernanke is set to appear at 10 a.m. on Feb. 9, while Elmendorf will testify Feb. 10, the panel announced Monday. 

The Federal Reserve is planning to purchase $600 billion in government debt through the first six months of the year to spur the economic expansion. 

The nonpartisan CBO released a report last week that shows a record $1.5 trillion deficit projection for this year.

Senate Budget Committee ranking member Jeff Sessions (R-Ala.) said on the Senate floor Monday that President Obama must make deeper budget cuts in his 2012 proposal than the president outlined in the State of the Union address.

Sessions said the Obama 2012 budget proposal, due the week of Feb. 14, may be the administration’s “last chance” to get it right.

“He cannot present the Congress with the same unserious plan he presented Tuesday night,” he said. “We are going to see if the president is moving with the American people to fiscal sanity.”

House Budget Committee Chairman Paul Ryan (R-Wis.) intends to release spending ceilings for 2011 next week.

The numbers cannot be put into the Congressional Record until the House comes back into session next Tuesday, a congressional aide explained.

House Republicans are devising a floor debate plan that tries to broker a divide over how deeply to cut spending.