Conrad will take final two years to focus on deficit reduction, agriculture bill

Last year, Conrad expressed skepticism over the Obama administration's long-term budget targets, and he has joined Republicans in calling for budget cuts as part of increasing the debt ceiling, although he won't oppose short-term boosts in the limit on government borrowing.

Sen. Patty Murray (D-Wash.), who won a tight reelection battle in November and is next in line to take the helm of the panel, said she's convinced Democrats can hold on to the seat in North Dakota despite aggressive moves by Republicans in the state to take over the spot held by Conrad since 1986.

Before his announcement on Tuesday, Conrad had already said lawmakers would have to make some tough decisions on cutting spending that could cost them their seats, an issue Conrad won't have to consider moving forward. 

"There are serious challenges facing our state and nation, like a $14 trillion debt and America's dependence on foreign oil," Conrad said in a statement. "It is more important I spend my time and energy trying to solve these problems than to be distracted by a campaign for reelection."

As Budget chairman, Conrad formed a strong partnership with former ranking member Judd Gregg (R-N.H.), who retired at the end of the 111th Congress, as they jointly pushed for a bipartisan panel to examine budget issues and make recommendations to Congress. 

He supported a range of policy suggestions that emerged from that group, led by former Sen. Alan Simpson (R-Wyo.) and former Clinton Chief of Staff Erskine Bowles, that calls for a nearly $4 trillion deficit-reduction plan.

During the past couple of months, Conrad has reiterated his support for a long-term budget plan, along with an overhaul of the federal tax structure and Social Security, a sensitive issue with liberal Democrats. 

"You've got the left that really doesn't want to touch entitlements, Social Security and Medicare. You have the right that doesn't want to touch revenue," he said in a recent CNBC interview. "Both of them have to acknowledge the hard reality when you're borrowing 40 cents of every dollar you spend, when revenue is the lowest it's been as a share of the economy in 60 years and spending as a share of the economy is the highest it's been in 60 years. We've got to work both sides of that equation."

Entitlement spending represents more than two-thirds of the federal budget, more than $2 trillion in mandatory spending. 

Conrad hasn't ruled out cuts in agriculture spending, including some farm subsidies such as ethanol that could raise the ire of many in his state and throughout the country.  

Recently asked about cutting funding for ethanol, Conrad said the fiscal commission's plan, released in December, suggested a cut from agriculture of $10 billion on a $140 billion base. 

"So everything is on the table," he said. "Every part of the budget is going to have to contribute, including defense."