–Senate Budget Chairman Conrad: ‘Tax Reform Is Essential’
–Fixing Tax Expenditures Is ‘Heart’ Of Reform Efforts
–Tax Expenditures Are ‘Backdoor Way of Spending Money’
–Senate Majority Whip Durbin Says Bipartisan Plan ‘Will Take Time’

By John Shaw

WASHINGTON (MNI) – Senate Budget Committee Chairman Kent Conrad
said Wednesday the effort to assemble a comprehensive deficit reduction
plan must include tax reform, adding that the “heart” of tax reform must
be an effort to cut back the so-called tax expenditures.

In comments during a Budget Committee hearing on tax expenditures,
Conrad repeated his view that controls of discretionary and entitlement
spending are critical to deficit reduction efforts as is an effort to
overhaul the tax code to make it more efficient and more structured to
encourage economic growth.

“Both sides of the ledger are part of the problem,” Conrad said.

“Tax reform is essential,” he added.

Conrad said that overhauling the nation’s tax cut code must include
an aggressive effort to scale-back the $1 trillion in annual tax
expenditures.

Conrad said tax expenditures have “received far too little
scrutiny” as policymakers examine ways to reduce the federal budget.

“They have become a backdoor way of spending federal money,”
Conrad said.

The largest tax expenditures are the exclusion of employer
contributions for health care (2010 cost: $262 billion), exclusion of
retirement contributions and earnings (2010 cost: $123 billion), and the
mortgage interest deduction for owner-occupied homes (2010 cost: $92
billion).

Conrad has been one of the leaders of a bipartisan group of
senators that is trying to assemble a deficit reduction plan that uses
the Simpson-Bowles package as its template.

That plan calls for about $4 trillion in deficit reduction over
a decade.

Speaking earlier Wednesday, Senate Majority Whip Dick Durbin — who
has also been working on a bipartisan deficit reduction plan with
Conrad — said that it will “take time” for their group to assemble a
package.

Durbin played down the possibility of a quick agreement on a
comprehensive bipartisan deficit reduction plan.

** Market News International Washington Bureau: (202) 371-2121 **

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