–Senate Budget Chief: Reid Plan Can Be ‘Guts’ Of Debt Hike Accord
–After Debt Hike, Must Move To Get $4T Deficit Cut Plan
–‘We Don’t ‘Have A Precise Roadmap At This Moment’

By John Shaw

WASHINGTON (MNI) – Senate Budget Committee Chairman Kent Conrad
Wednesday said despite the appearance of total gridlock on Capitol Hill
regarding debt ceiling legislation “there are a lot of talks underway”
to resolve the impasse.

In an interview on MSNBC, Conrad said the time is growing short for
a fiscal accord. “We are getting closer and closer to a moment that is
critically important for the country,” Conrad said.

Conrad said the scenario that he believes is most likely is an
agreement on about a $2 trillion spending cut package along the lines of
what has been proposed by Senate Majority Leader Harry Reid and the
creation of a “process” to get an additional $2 trillion in savings.

“We’ve got to have a package of at least $4 trillion at the end of
the day,” Conrad said.

The Senate Budget Committee chairman said Reid’s plan represents
“the guts of what can ultimately get across the finish line” now.

But Conrad suggested the coming week is likely to be tumultuous.

“We don’t have a precise roadmap at this moment,” Conrad said.

Reid’s has said his plan would cut spending by $2.7 trillion over
ten years and allow for passage of a $2.4 trillion debt ceiling
increase.

The Congressional Budget Office estimated Wednesday that Reid’s
plan would cut deficits by $2.2 trillion. The CBO estimated the first
installment of House Speaker John Boehner’s plan would cut deficits by
$850 billion.

Boehner’s plan was designed to raise the debt ceiling by $1
trillion this year and $1.6 trillion next year. The initial $1 trillion
debt ceiling increase would require Congress to pass $1.2 trillion in
spending cuts through imposing caps on discretionary spending.

Approval of the second tranche of $1.6 trillion would require
passage of $1.8 trillion in spending cuts in entitlement programs.

Under Boehner’s plan, the House and Senate would also have to vote
on a balanced budget constitutional amendment between this October and
the end of the year.

The White House issued a veto threat regarding Boehner’s bill
Tuesday afternoon.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Tim Geithner has said that Congress must pass
legislation increasing the debt ceiling by August 2.

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

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