–Senate Budget Chief Decides To Offer Simpson-Bowles Plan
–Some See Move As Shrewd, Others Deride As Lame Gesture

By John Shaw

WASHINGTON (MNI) – There are two completely different ways to think
about Senate Budget Committee Chair Kent Conrad’s decision to introduce
the Simpson-Bowles deficit reduction plan as his fiscal year 2013 budget
resolution.

According to one school of thought Conrad made a bold and
intriguing decision, seizing as his own the one deficit reduction plan
that has generated wide-spread praise from budget experts and deficit
hawks.

This could be called the “grand slam” school.

But there is another view of Conrad’s decision which sees the
Senate Budget Committee chairman’s move as a timid gesture, the tepid
half-step of a lawmaker who is more talk than action.

Call this, to switch sports metaphors, the “punt” school of
thought.

Conrad will formally present the Simpson-Bowles plan Wednesday to
the Senate Budget Committee at 2:00 p.m. ET. He has said the session
will allow senators on the panel to make statements about the plan, but
he will not hold any votes on the package or amendments.

Sen. Jeff Sessions, the top Republican on the Budget Committee,
said Tuesday he is “very surprised” by Conrad’s decision not to allow
any votes on his budget or any amendments. He blasted Senate Democrats
for “a lack of will, a lack of courage, and a lack of ability” on fiscal
issues.

In remarks Wednesday on the Senate floor, Minority Leader Mitch
McConnell scorched Conrad’s decision to avoid any Senate votes on a
budget as buckling to “political pressure.”

“It’s a disgrace,” McConnell said, referring to Conrad’s budget
decision and other steps Democrats have taken on economic matters.

Maya MacGuineas, president of the Committee for a Responsible
Federal Budget, praised Conrad’s formal embrace of Simpson-Bowles.

“Senator Conrad deserves true recognition for not shying away from
the kinds of changes sufficient in size and scope to tackle the
country’s rising debt,” she said in a statement.

But she also challenged his decision to defer any budget votes
until after the election.

“Work to reach a bipartisan consensus on a fiscal plan large
enough to stabilize the debt must begin now — not later, not after the
elections, but right now. The longer we wait, the greater the risk we
take,” she said.

Conrad said Tuesday he hopes re-introducing the Simpson-Bowles plan
will spur serious fiscal talks and serve as the basis of intense budget
talks over the coming months.

But he said he will not bring the plan to a vote until later, when
a bipartisan consensus emerges.

“The is the wrong time to vote in committee. This is the wrong time
to vote in the Senate,” Conrad said, adding that a premature vote would
set back deficit reduction efforts.

Developing a bipartisan budget agreement will take “weeks and weeks
and months and months” of negotiations. “We need to start the
negotiation and discussion now,” Conrad said, adding “it’s going to take
time.”

The Simpson-Bowles plan calls for more $5.4 trillion in deficit
reduction over a decade, with spending cuts and tax increases. It would
reduce spending to about 22% of GDP by 2022 and bring revenues up to
about 21% of GDP in 2022.

“It’s comprehensive. It’s balanced. It’s fair,” Conrad said of the
package.

But he said the Simpson-Bowles plan must be revised because it was
developed nearly two years ago and significant economic events have
occurred since then including last summer’s debt limit agreement.

The Senate Budget panel chief says the Simpson-Bowles plan can
“provide a blueprint for going forward” and secure a bipartisan budget
accord.

Senate Majority Leader Harry Reid has said for months that he
does not expect the full Senate to debate any budget resolution this
spring.

Reid has said last year’s debt ceiling agreement has already
settled discretionary spending levels for the coming fiscal year which
is one of the central purposes of a budget resolution.

Budget resolutions set broad spending and revenue goals and make
deficit projections. They are congressional blueprints and are not
binding law. To actually change spending and tax laws, separate
legislation is needed.

Several weeks ago, the House approved House Budget Committee
Chairman Paul Ryan’s budget resolution on a 228 to 191 vote. All
Democrats opposed the GOP budget; all Republicans, except for 10, voted
for Ryan’s plan.

Ryan has said his budget would cut spending by $5 trillion more
than would Obama’s budget over a decade and would reduce deficits by
$3.3 trillion more than would the president’s budget.

Ryan’s budget makes deep cuts in the projected growth of federal
spending and endorses the fundamental overhaul of Medicare, Medicaid and
welfare programs. It also calls for repealing the 2010 health care law.

Ryan’s budget backs the extension of Bush-era tax cuts and
undertaking fundamental tax reform in which the current six individual
rates would be collapsed into two rates, 10% and 25%. The corporate rate
would be cut to 25%. He argues that so-called tax expenditures should
be sharply curtailed, but does not say which ones should be eliminated
or reduced.

Ryan’s budget sets FY 2013 discretionary spending at $1.028
trillion, $19 billion below the $1.047 trillion that was allowed for in
last summer’s debt ceiling agreement.

Ryan also calls for enacting a package of spending cuts to prevent
the $110 billion in across-the-board spending cuts that are scheduled to
begin next January.

** MNI Washington Bureau: (202) 371-2121 **

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