–In Tactical Move, Senate Dems Want GOP To Vote On Rep. Ryan Budget
–Senate Republicans Want To Force Dems To Vote On Obama Budget
–Senate Budget Committee Chairman Conrad Struggles To Unite Dems

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid has set up a
vote next week in the Senate on the fiscal year 2012 budget resolution
that was approved by the House and drafted by House Budget Committee
Chairman Paul Ryan.

Reid has signalled for several weeks that he wanted the Senate to
take up the FY’12 budget resolution that was approved by the House in
April.

Reid has said the Ryan budget is a draconian plan that dismantles
Medicare in its current form. He has all but taunted Senate Republicans
to vote for the Ryan plan. Reid has said Ryan’s budget is a radical plan
that is deeply unpopular with the American public and is even unsettling
for many Republicans.

Senate Minority Leader Mitch McConnell has said if Reid forces a
Senate vote on the Ryan budget he will force a vote on President Obama’s
budget which has garnered only tepid support from Democrats.

The decision by both Reid and McConnell to force votes on the Ryan
and Obama budgets is widely seen as tactical skirmishing rather than an
attempt to clarify issues or forge fiscal compromises.

Ryan’s FY’12 budget resolution was approved by the House in April
on a party line vote. It 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.

McConnell argues almost daily that Obama has failed to confront the
severity of the nation’s fiscal problems. He also lambasts Senate
Democrats for failing to offer their own alternative.

This later criticism is likely to intensify if Senate Budget
Committee Chairman Kent Conrad decides not to offer an FY’12 budget
resolution.

For months, Conrad has been working on two tracks. As a member of
the Senate’s so-called “Gang of Six,” he has tried to negotiate a
bipartisan budget compromise.

The “Gang of Six” began work late last year as the three Democratic
and three Republican senators tried to craft a bipartisan budget
agreement based on the Simpson-Bowles report which urged about $4
trillion in deficit cuts over a decade.

The three Democratic senators — Mark Warner, Richard Durbin, and
Kent Conrad — and the three Republican senators — Tom Coburn, Saxby
Chamblis and Mike Crapo — met several times a week for months in an
attempt to craft a budget agreement. Coburn formally dropped out of the
talks this week.

When it became clear several weeks ago that the “Gang of Six,” was
unlikely to reach an agreement, Conrad shifted to trying to rally Senate
Democrats around an FY’12 budget alternative.

Conrad is determined to offer a plan that cuts the deficit by about
$4 trillion over the next decade. But to advance the plan through the
Senate Budget Committee with only a 12 to 11 Democratic majority, Conrad
must win support of all the Democrats.

Last week, one version of Conrad’s budget was in circulation that
would cut the deficit by about $4 trillion over a decade. It would do so
by raising taxes by about $2 trillion and cutting spending by $1.5
trillion. The additional savings of about $600 billion would come from
reduced interest payments.

Conrad’s plan would secure about $900 billion from defense programs
and $300 billion in non-security spending over a decade. It would also
secure about $300 billion in entitlement savings over the decade.

Senate Republicans blasted Conrad’s draft as too heavy on tax
increases and too light on spending cuts. Unfortunately for Conrad,
several moderate Democrats have offered only tepid praise for Conrad’s
plan and stopped well short of supporting it.

Conrad has also discussed an FY’12 budget alternative that would be
much heavier on spending cuts and lighter on tax hikes. But liberal
Democratic senators indicated they would be unlikely to support that
kind of budget.

Last week, Reid said that he is urging Senate Democrats to withhold
supporting any budget alternative until the fiscal endgame becomes
clearer.

Budget experts believe the current fiscal impasse injects urgency
into the budget talks led by Vice President Biden.

Biden has held three rounds of talks with congressional leaders to
explore a deficit reduction package that might be advanced to coincide
with this summer’s vote on debt ceiling legislation.

Biden has been meeting 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.

The Biden talks will resume next Tuesday.

Kyl, a senior GOP participant to the talks, told reporters
Wednesday that the Biden talks are more focused on assembling a package
of spending cuts that would be linked with the debt ceiling than they
are in developing a comprehensive fiscal plan.

He said there is broad agreement on about $150 billion in spending
savings, well short of the “trillions” in spending cuts that Republican
leaders are calling for.

“We all recognize we have to do a lot more than that,” Kyl said.

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

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