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Sen. Conrad Warns Boehner on Shutdown

Feb. 19 (Bloomberg) -- Senate Budget Committee Chairman Kent Conrad said the Democratic-controlled chamber will cut this year’s U.S. budget by about half what House Republicans are demanding and urged House Speaker John Boehner to stop making threats about a government shutdown and start negotiating.

The Republican plan “will not be successful in the Senate, even though I think virtually everybody understands we’ve got to cut spending,” Conrad said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Conrad, a North Dakota Democrat who isn’t seeking re-election next year, said Boehner risks a government shutdown with his demands and should start negotiating with the Senate. Boehner on Feb. 17 said he wouldn’t accept a short-term extension of the government’s current spending authority without more cuts.

“That kind of talk, absent negotiations, really risks a shutdown of the government, which is in no one’s interest,” Conrad said. “I hope he’ll, instead of issuing that kind of threat, negotiate. That’s what we do to resolve problems.”

The House early today passed a spending plan for the remaining seven months of this fiscal year that includes at least $61 billion in cuts from last year’s budget. It would make broad reductions to programs ranging from health and education to energy, science and the arts to fulfill a Republican campaign pledge to shrink government. Democrats reject the plan as extreme and harmful to the economic recovery.

Conrad said fiscal 2011 spending levels are already $42 billion less than what President Barack Obama requested. Republicans seek $100 billion less than what Obama wanted. Conrad said Senate Democrats support something in line with the $42 billion.

Comprehensive Plan

Conrad is working with a bipartisan group of senators on a more encompassing, long-term plan to bring down the deficit, projected to reach $1.6 trillion this year. He said lawmakers could have a “framework agreement” on a comprehensive proposal before a vote in the coming months to raise the U.S. debt ceiling.

The U.S. debt is projected by the Treasury Department to reach its authorized ceiling of $14.3 trillion within a few months, setting up another showdown as Republicans demand deep spending cuts before any vote to raise the limit.

More Time Needed

“Certainly, you couldn’t have a plan that’s implemented, because just the legislative drafting and the scoring of it, the legislative details take more time,” he said. “But you could have a framework agreement.”

Conrad said a package would have to include tax increases, and that changes to Social Security don’t have to be part of a deficit-reduction package. Senate Majority Leader Harry Reid has said Social Security cuts should be off the table.

“Social Security is not contributing to the deficit,” Conrad said. “Our problem is in other entitlement accounts. It’s in domestic spending.”

Conrad was a member of Obama’s debt commission and backed the panel’s $3.8 trillion budget-cutting plan that mixed tax increases and spending cuts in entitlement programs such as Medicare and Social Security. It was rejected by the full panel in December.

Conrad said some tax rates could be reduced as part of a comprehensive package.

‘Broadening the Base’

“By broadening the base, that gives you enough money to not only reduce the deficit, combined with spending cuts and entitlement reform, but it also allows you to reduce tax rates to make America more competitive,” he said. “And that’s, I think, the great appeal of what the commission recommended.”

On the issue of the spreading unrest in the Middle East and whether the U.S. government should encourage demonstrations, Conrad said U.S. influence is limited.

Demonstrations in Bahrain erupted as clashes or rallies took place in Libya, Yemen, Jordan, Kuwait and Egypt.

The dissent in Bahrain follows the toppling of autocratic rulers by popular movements in Egypt and Tunisia and marks the spread of unrest into the Persian Gulf, where most of the Middle East’s oil is produced.

“There are limits to American power and influence,” Conrad said. “We ought to set a good example. The fact is, democracy and the basic freedoms that we enjoy are things that I think people around the world aspire to.”


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Feb. 19 (Bloomberg) -- Senate Budget Committee Chairman Kent Conrad said the Democratic-controlled chamber will cut this year s U.S. budget by about half what House Republicans are demanding and urged House Speaker John Boehner to stop making threats about a government...
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