Senate Dems rally around Conrad's left-leaning budget proposal, tax raises

Senate Democrats on Wednesday embraced a budget proposal that is significantly to the left of President Obama’s plan on raising new tax revenues. 

The prospects of the blueprint passing the Senate are bleak, but its emergence after months of negotiation is aimed at countering GOP criticisms that Democrats haven’t passed a budget in two years. Democrats believe some of the proposal could be merged into a bipartisan agreement on raising the debt ceiling. 

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The budget plan would reduce the deficit by $4 trillion over 10 years, according to the baseline used by its author, Senate Budget Committee Chairman Kent Conrad (D-N.D.). Using the benchmark assumptions of Obama’s fiscal commission, Conrad said his budget would reduce the deficit by nearly $5 trillion.

Roughly half of that total would come from raising government revenues through new taxes and the closure of special tax loopholes, according to Senate sources familiar with the plan. 

That would put the total amount of additional tax revenues called for by the Conrad budget in the neighborhood of $2 trillion over 10 years, significantly more than what Obama has proposed. 

In April, Obama called for a ratio of $3 in spending cuts for every $1 in tax increases, according to a White House fact sheet released at the time. 

Conrad appears to have the votes to clear his measure through his panel, though he will need two GOP targets in 2012 — Sens. Bill Nelson (D-Fla.) and Debbie Stabenow (D-Mich.) — to back the plan. Both senators sit on the Budget Committee, which comprises 12 Democrats and 11 Republicans. Budget panel member Bernie Sanders (I-Vt.) now supports Conrad’s plan after criticizing an earlier draft of it. 

Other vulnerable Democratic members who are up for reelection, such as Sens. Ben Nelson (Neb.), Joe Manchin (W.Va.), Jon Tester (Mont.) and Sherrod Brown (Ohio), might not have to vote on the resolution. 

Senate Majority Whip Dick Durbin (D-Ill.) said Wednesday that leaders are weighing the “pros and cons” of holding a floor vote.

In a release issued Wednesday, Ben Nelson signaled he is wary of Conrad’s plan, calling for debt reduction to focus on spending cuts. 

Other Senate Democrats rallied around Conrad’s new proposal during a private lunch meeting Wednesday, where the retiring senator unveiled his long-delayed plan. 

“I like it,” said Sen. Dianne Feinstein (D-Calif.). “I don’t have all the details, but it’s clear to me that the Budget Committee and the leadership of Sen. Conrad has put together a very careful budget.”

Another Democratic senator who attended the meeting said: “Nobody spoke against it. Nobody.” 

Some Democratic senators have reservations about the sprawling plan, but they have decided to set their qualms aside for the sake of party unity. Many have realized that the internal disputes that had stymied their ability to produce a budget blueprint were becoming a political liability. 

“Everyone’s got problems with it,” said one Democratic senator. “Hell, I have problems with it. But the reaction was very positive.” 

Conrad had opted to keep the details of his blueprint under wraps while he works over the next several days to address some of those concerns. 

Democratic senators who requested anonymity said Conrad’s plan also calls for significant cuts to Pentagon spending and sets up a sizable fund for infrastructure spending.

Sen. Kay Hagan (D), a centrist from North Carolina, said she wants spending cuts to make up a larger percentage of the proposed savings over the next decade. 

Hagan said she would like to see a ratio similar to what the fiscal commission chaired by former Sen. Alan Simpson (R-Wyo.) and former Clinton White House Chief of Staff Erskine Bowles proposed. 

The fiscal commission suggested $2.2 trillion in discretionary and mandatory spending cuts and $785 billion in new revenues from reforming the tax code and other measures, a ratio of roughly 2.8 to 1. 

Senate Republican Leader Mitch McConnell (Ky.) in recent weeks has argued that tax increases should be taken off the table because Democrats can’t even bring themselves to vote for them. He has noted that Democrats voted to extend virtually all of the Bush tax rates last year, when they controlled the Senate and House. 

The Senate Democratic budget is designed to make a strong statement that tax revenues should be increased substantially by requiring wealthy families to pay more into federal coffers and closing special corporate tax breaks. The plan includes a tax increase for couples making more than $1 million per year. 

Senate Republican leadership aides said Wednesday they were eager to see the details of Conrad’s plan, while wasting no time in blasting Democrats for raising taxes by $2 trillion. 

Democrats argued the Conrad resolution provides a sharp contrast with the House-passed budget plan sponsored by Rep. Paul Ryan (R-Wis.), which would replace Medicare with what Republicans call a “premium support” plan. Democrats say Ryan would turn Medicare into a voucher system costing seniors an additional $6,400 per year. 

Durbin said Conrad’s budget proposal does not touch Social Security and has a “very small,” 10-year effect on Medicaid. “It does not savage it,” he said. The Illinois Democrat also noted that the House-passed budget cuts Medicaid spending in half. 

Durbin said that the plan’s cuts to Medicare are only $29 billion over 10 years, but later expressed some doubt about the accuracy of that number. 

Sen. Joe Lieberman (Conn.), an Independent who caucuses with Democrats, said he was worried about the size of cuts to national-security spending and questioned if the proposed Medicare cuts would do enough to extend the program’s solvency. 

Julian Pecquet and Erik Wasson contributed to this report.