Sen. Conrad says budget ready to go

Senate Budget Committee Chairman Kent Conrad (D-N.D.) announced Wednesday that Democrats had finally reached an agreement on a budget plan.

His announcement came as the leadership met with President Obama to inform him that their members had unified around a message for the debt-limit showdown.

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Conrad’s proposal, which he said he plans to introduce as soon as next week, would cut more than $4 trillion from the deficit, a greater reduction than what Obama’s fiscal commission had recommended. 

“We’ve reached an agreement after weeks of work,” Conrad told The Hill on Wednesday afternoon. “I think it’s big.”

Democrats have also settled upon the message they want Obama to push in the public battle with Republicans over the $14.3 trillion debt limit, which Treasury says must be raised by Aug. 2. 

The fundamental message to the president is that any deficit-reduction deal with Republicans must be based on the principle of “fairness.”

The deal cannot cut Medicare benefits or slash Medicaid. It must raise tax revenues. It should make investments in infrastructure and green-energy technology to spur job growth. It should cut defense as well as domestic social spending. 

“The message is we know what our priorities are; we’ve said them over and over again; let’s make sure we’re on the same page with those priorities. Our understanding is Social Security, Medicare, Medicaid and the middle class will be protected and everyone will pay a fair share,” Sen. Barbara Boxer (Calif.), a senior member of the Democratic Conference, said of the message leaders would take to the president Wednesday.

Sen. Jay Rockefeller (D), whose constituents in West Virginia depend heavily on federal support for Medicaid, said he has insisted that Senate Majority Leader Harry Reid (D-Nev.) remind Obama to protect the program.  

“The caucus wants to see revenues on the table, they want to see cuts in the Defense Department, they want fairness,” Rockefeller said.

Democratic leaders have ruled out cuts to Medicare benefits. Rockefeller said he has helped convince them to take Medicaid cuts off the table as well. 

“I worked very hard for that in a meeting,” he said. “I just kept at it.

“I think if Republicans put revenues on the table, then my fear is the administration will say, ‘OK, now let’s go get Medicaid,’ because it’s the third-largest program in government,” he said. 

Rockefeller could accept some cuts to Medicaid, but not a massive across-the-board cut. 

“We all need to be steeled,” he said. “Democrats aren’t very good at messaging.”

Wednesday’s meeting at the White House included Reid, Democratic Whip Dick Durbin (Ill.), Democratic Policy Committee Chairman Charles Schumer (N.Y.) and Democratic Senatorial Campaign Committee Chairwoman Patty Murray (Wash.).

Some Democrats are leery of Obama giving up too much ground to Republicans in a major deficit-reduction deal. 

They carry uncomfortable memories of the agreement Obama forged with Senate Republican Leader Mitch McConnell (Ky.) in December, which extended almost all of the Bush-era tax cuts. In return, the president won a yearlong extension of unemployment benefits. 

As months pass and Republicans push for trillions in spending cuts while refusing to consider any tax increases, that December deal has begun to look to many Democrats like a missed opportunity. 

Democrats have become exasperated at Republican leaders’ staunch refusal to even consider ending special tax breaks to reduce the deficit. 

Republicans are threatening to block the debt-limit increase unless Democrats agree to massive spending cuts, and have insisted on cuts to Medicare. 

Economists including Federal Reserve Chairman Ben Bernanke have warned that failure to increase national borrowing authority could crash the economy, but those warnings have done little to shape public opinion. Polling still shows more Americans oppose raising the debt limit than support doing so. 

Some Democrats complain the president needs to use his bully pulpit more aggressively to pressure Republicans to agree to a debt-ceiling increase. 

Obama responded to the criticism Wednesday by making a forceful presentation at one of his first news conferences in months. He took direct aim at Congress and challenged lawmakers to skip their recesses until deficit negotiations are solved. 

“They’re in one week. They’re out one week. And then they’re saying, ‘Obama’s got to step in,’ ” the president said. “You need to be here. I’ve been here. I’ve been doing Afghanistan and bin Laden and the Greek crisis and — you stay here. Let’s get it done.”

Obama criticized Republicans for defending special tax breaks for corporate jets and major oil companies, something Democratic lawmakers had been waiting for weeks for him to do.

Buzz about the speech quickly spread around the Senate floor as lawmakers voted Wednesday. 

Senate Democratic leaders discussed the possibility of canceling the Senate’s July 4 recess and convened a special meeting with rank-and-file members Wednesday afternoon to discuss next steps. 

The collapse of the deficit-reduction talks led by Vice President Biden has instilled a new sense of urgency and unity among Democratic lawmakers. They say Republicans are prepared to take the standoff to the brink of a national default and must coalesce to put up effective opposition. 

“Right now we’re marshaling our forces,” said Sen. Ben Cardin (D-Md.). “Clearly the bipartisan negotiations have not produced. There is a real concern about whether we’ll have a real plan to reduce the deficit, which is something that was our objective.”

The emergence of a Senate Democratic budget deal as soon as next week will give them ammunition in the public battle they expect over the final weeks of the debt-limit debate. 

“Let’s be very clear on our priorities. It starts, No. 1, with a credible plan to deal with the deficit. No. 2, it’s fairness, it has to include all the elements. No. 3, we need to protect our most vulnerable and our economic job growth,” Cardin said. “There are the principles. Let us now show the American public what type of deficit plan would accomplish those three objectives.

“Starting there, let’s get as far as we can,” Cardin said.