Key Senator to Intro Budget As Early As Next Week Slashing Debt $4 Trillion Over 10 Years

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Senate Budget Cmte Chairman Kent Conrad, D-ND, plans to introduce a FY 2012 budget "as early as next week," one that "borrows from the (president's) fiscal commission" the plan of cutting the debt by roughly $4 trillion over 10 years, and reducing marginal income tax rates. This would be financed by, according to Conrad, "broadening the (tax) base, reducing tax preferences, exclusions, and also going after the offshore tax havens, which have proliferated, and the abusive tax shelters...a savings of $150 billion a year."

The senator, a member of the bipartisan "Gang of Six" attempting for months to craft a deficit and debt reduction package, said while he remains "very hopeful" the group will produce a final plan, "I'm running out of time." According to numerous sources, the group is not expected to produce even a draft product this week. Conrad said the gang "may or may not be completed" by the time he moves on his own budget, but no one should read into his independent move that the gang has failed.

Conrad outlined his own draft plan to his fellow Democrats Tuesday in a closed luncheon meeting in what Senate Majority Leader Harry Reid, D-Nev., called "a very chartty presentation." The chairman is known to be fond of charts.  Reid did not, however, endorse the Conrad draft plan, rather he said he counseled his members to be patient and review the many proposals out there to tackle the debt, saying there is "plenty of time" to make a decision.

The Conrad budget "does not address Social Security," the chairman said, putting reform of that retirement program "on a separate course." The senator also plans to call for a "modest savings" in Medicare, and outlines a 10-year so-called "doc fix," to keep Medicare doctors from being hit by increasingly higher cuts in their federal reimbursement rates. Congress has, to date, been unable to find a way to pay for such a lengthy, costly fix.

The budget that comes from the Budget Committee does not contain specifics, merely directions for spending and savings from relevant committees. To the Finance Committee, which has jurisdiction over Medicare, for example, the chairman would direct that panel to raise a specific amount of revenue in the fiscal year. It is up to that committee to decide how to do that, be it through tax increases or some other measures.

As for how much revenue Conrad will need to produce the expected $4 trillion in savings, the chairman said, "No final decisions have been made."

As Congress must increase the $14.3 trillion debt ceiling by about August 2, 2011, according to the Treasury Department, the Conrad budget could prove critical in providing a roadmap to the kind of savings senators, particularly Democrats, are looking for before they can support any rise in the borrowing limit.