–Vice President Biden Sees Broad Accord On $1 Trillion In Savings
–In Symbolic, Political Votes, Senate Defeats Four Budgets
–Senate Budget Committee Chairman Conrad Says Biden Talks Are Key
–Sen. Conrad: ‘Makes No Sense’ For Senate Dems To Offer Own Plan Now

By John Shaw

WASHINGTON (MNI) – In unusually frank assessments of the state of
fiscal policy deliberations on Capitol, both top Democratic and
Republican lawmakers said this week the traditional congressional budget
process is now virtually irrelevant and any hope for a fiscal agreement
now rests on budget negotiations led by Vice President Biden.

The peripheral role of the regular congressional budget process was
in stark display this week, as the Senate voted on four budget
plans–and defeated all of them.

Senate Budget Committee Chairman Kent Conrad, who has been working
on various versions of a fiscal year 2012 budget, defended his decision
not to offer a Senate Democratic alternative.

“It makes no sense for us to go to a budget mark up at this moment
that would simply be a partisan mark up when bipartisan efforts are
underway,” Conrad said before the Senate budget votes Wednesday.

He cited the talks led by Biden as “this new effort, a leadership
effort, with our president represented at the table. We ought to give
that a chance before we pass a budget resolution that may be required to
implement any plan they can come up with.”

“We don’t need a Democratic budget or a Republican budget. We need
an American budget. We need a budget that is bipartisan,” Conrad added.

In a series of symbolic and political votes, the Senate first
rejected the fiscal year 2012 budget that was drafted by House
Republicans and passed by the House last month.

The Senate vote was on a motion to take up the Ryan budget. It was
rejected on a 57 to 40 vote. In other words, 57 senators voted not to
take up Ryan’s budget while 40 voted to consider the plan. It was a
mostly party line vote, with five Republicans joining Democrats in
blocking the Ryan budget.

Ryan’s FY’12 budget resolution would cut spending by $5.8 trillion
over a decade compared to President Obama’s February budget. It would
reduce budget deficits by $1.6 trillion over a decade.

Democrats blasted many features of Ryan’s plan and have been
particularly focused on its recommendation to fundamentally overhaul
Medicare. Senate Majority Leader Harry Reid insisted that Ryan’s fiscal
plan would effectively “kill” Medicare.

Senate Minority Leader Mitch McConnell said the Democratic move to
force a vote on the Ryan budget was a political move to improve their
electoral prospects in 2012.

The Senate voted 97 to 0 to block consideration of President
Obama’s FY’12 budget. Republicans said the Obama budget does not
confront the nation’s severe fiscal problems. Democrats said the
president has made adjustments since his budget was first offered in
February.

The Senate also rejected two Republican budgets. One by Sen. Rand
Paul, would have made massive spending cuts in order to balance the
budget in five years. It only received seven votes.

A second Republican budget by Sen. Pat Toomey would have balanced
the budget in nine years by bringing spending down to 18.5% of GDP. It
received 42 Republican votes.

McConnell scorched Senate Democratic leaders for their fiscal
failures. “This is a complete and total abdication of their
responsibilities. And there is no excuse for it. We have an obligation
to come up with a plan. Democrats are officially abdicating their
responsibility this week,” he said.

Meanwhile, Biden held two meetings of talks this week and it seems
likely that the negotiations will extend well into July

Biden told reporters Tuesday that the talks are going well, but
difficult decisions are on the horizon.

“Everybody knows at the end of the day we’re going to have to make
some really tough decisions on some of the big ticket items, but I think
we’re in a position where we’ll be able to get to well above a trillion
dollars pretty quick in terms of what would be a downpayment on the
process,” he said.

Biden added that he’s “confident” that there will be an agreement
on a “relatively large number” of budget savings now which will be a
“downpayment” on a larger package of $4 trillion in budget savings.

The Vice President said the final agreement will have to include
tax changes. “Revenues have to be in the deal,” he said.

The Biden talks are exploring a deficit reduction package that can
be developed to coincide with this summer’s vote on debt ceiling
legislation.

Biden is negotiating with House Majority Leader Eric Cantor, Senate
Minority Whip Jon Kyl, Senate Appropriations Committee Chairman Dan
Inouye, Senate Finance Committee Chairman Max Baucus, Assistant House
Minority Leader Jim Clyburn and Rep. Chris Van Hollen, the top Democrat
on the House Budget Committee.

The administration is represented by Biden, Treasury Secretary Tim
Geithner, White House budget director Jack Lew and the director of the
National Economic Council Gene Sperling.

Congressional Republicans have said they want a package of
“trillions” in spending reductions as a condition for voting to increase
the debt ceiling this summer.

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

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