Momentum builds for debt deal

Momentum builds for debt deal

Momentum appears to be building toward a grand compromise on reducing the budget deficit that could be based on recommendations from President Obama’s debt commission.

Senate Democrats will hear a pitch for using the debt commission’s proposals on Wednesday from their leading budget hawk, who is trying to hammer home the message that both ends of Pennsylvania Avenue must get serious about slashing the nation’s rising debt.

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The presentation at the Senate Democratic retreat will come from Sen. Kent Conrad (N.D.), the chairman of the Senate Budget Committee, who dropped a reelection bid last month saying he feared it would distract him from fixing America’s fiscal condition.

Conrad is arguing that both parties must embrace Obama's debt commission plan as a starting point for seriously reducing the budget deficit. He has met with Obama’s budget director, Jack LewJacob (Jack) Joseph LewOvernight Finance: Hatch announces retirement from Senate | What you can expect from new tax code | Five ways finance laws could change in 2018 | Peter Thiel bets big on bitcoin Ex-Obama Treasury secretary: Tax cuts 'leaving us broke' Senator demands answers from DOJ on Russia bribery probe MORE, who was a key player in the tax deal reached between the White House and Senate Republicans in December, to discuss the budget.

Some Senate Republicans have also signaled a new openness to the commission's recommendations, which included calls for entitlement reforms.

The Senate’s third-ranking Republican, Lamar AlexanderAndrew (Lamar) Lamar AlexanderWeek ahead: Lawmakers near deal on children's health funding Ryan suggests room for bipartisanship on ObamaCare Time to end fiscal year foolishness MORE (Tenn.), said Tuesday that he supports the effort to find a bipartisan solution based on the debt commission plan.

Separately, Senate GOP leader Mitch McConnellAddison (Mitch) Mitchell McConnellSessions: 'We should be like Canada' in how we take in immigrants NSA spying program overcomes key Senate hurdle Overnight Finance: Lawmakers see shutdown odds rising | Trump calls for looser rules for bank loans | Consumer bureau moves to revise payday lending rule | Trump warns China on trade deficit MORE (Ky.) suggested entitlement reform could be on the table, though he said flatly that this could only happen with leadership from the president.

McConnell also warned that a deficit-reduction plan should include no tax increases. “We don’t have this problem because we tax too little,” he told reporters.

In the House, Republicans on the Appropriations Committee on Tuesday formally agreed to budget ceilings that would reduce spending this year by $32 billion, as they prepared to release a continuing resolution detailing those cuts on Thursday.

But Conrad suggested on Tuesday that both parties must embrace the commission’s goals, and that proposals such as the House GOP plan are small potatoes and would do little to lower a deficit projected to reach $1.5 trillion this year.

He wants to focus the deficit-reduction debate on the debt commission’s long-term proposals instead of the variety of proposals unveiled by lawmakers to take bites out of the budget, or to give Congress or the president tools such as a balanced-budget amendment or line-item veto to instill fiscal austerity. 

“What matters to me is an overall plan that over 10 years … gets to the level of deficit reduction in the commission plan,” he told reporters. “All the rest of this is — to me, it just doesn’t go to the heart of the problem.”

Like most Democrats, Conrad does not support deep cuts to spending this year for fear they would slow the economic recovery. But he says deeper cuts combined with entitlement and tax reforms will be critical in the long term for the nation’s fiscal health. 

The commission failed to win the supermajority necessary to secure an up-or-down congressional vote on their chairmen’s plan, which recommended defense and non-defense spending caps, entitlement reforms and the elimination of tax breaks cherished by homeowners and businesses. 

It is unclear whether escalating concerns about the budget deficit will create the political will necessary for Democrats and Republicans to rally around one plan. 

Conrad and Sens. Mike CrapoMichael (Mike) Dean CrapoTrump calls for looser rules for bank loans in Dodd-Frank overhaul Week ahead: Lawmakers eye another short-term spending bill Overnight Finance: Trump promises farmers 'better deal' on NAFTA | Clock ticks to shutdown deadline | Dems worry Trump pressuring IRS on withholdings | SEC halts trading in digital currency firm MORE (R-Idaho), Tom CoburnThomas (Tom) Allen CoburnRepublicans in Congress shouldn't try to bring back earmarks Republicans should know reviving earmarks is a political nightmare Former GOP senator: Trump has a personality disorder MORE (R-Okla.) and Dick DurbinRichard (Dick) Joseph DurbinMcCarthy: ‘No deadline on DACA’ Ex-Sheriff David Clarke: Trump only one who 'cares about black American citizens' DHS chief takes heat over Trump furor MORE (D-Ill.) met for two hours Monday night in Durbin’s office as part of an ongoing effort to craft a bill from the commission’s recommendations. 


Conrad characterized the talks in Durbin’s office as constructive, but said it is too early for the group to produce legislative language.

The group working in Durbin’s office is coordinating its efforts with Sens. Mark WarnerMark Robert WarnerNSA spying program overcomes key Senate hurdle Dem lawmaker wants briefing on major chip vulnerabilities Week ahead: Tech giants to testify on extremist content MORE (D-Va.) and Saxby ChamblissClarence (Saxby) Saxby ChamblissLobbying World Former GOP senator: Let Dems engage on healthcare bill OPINION: Left-wing politics will be the demise of the Democratic Party MORE (R-Ga.), sources said. Those two senators are considering legislation proposing $4 trillion in budget cuts over the next decade, and are basing their discussions on the debt commission’s recommendations.

Conrad also has met with Treasury Secretary Timothy Geithner and Lew in recent days about finding a way forward. He said he has not been given a preview of the 2012 president’s budget, due out Feb. 14, however, and that there has not been progress on his call for a budget summit with the president.

Sen. Mark UdallMark Emery UdallDemocratic primary could upend bid for Colorado seat Picking 2018 candidates pits McConnell vs. GOP groups Gorsuch's critics, running out of arguments, falsely scream 'sexist' MORE (D-Colo.), who supports the debt-commission effort, said senators are still trying to figure out whhich commission recommendations to embrace. He said that breaking up the recommendations is not a good approach, since that would lessen the chances of a grand bargain that gets through Congress.

House lawmakers on Thursday will see details on how Republicans would cut $32 billion from this year’s spending when the Appropriations Committee releases a continuing resolution to fund the government for the rest of the year. 

While the House GOP is proposing a spending ceiling that would reduce current spending levels by $32 billion, cuts to non-security spending will actually be even greater since security and defense spending would increase by $9 billion under the GOP plan.


This story was posted at 1:37 p.m. and last updated at 8:36 p.m.