A top Senate Democrat Tuesday outlined a budget plan to cut the deficit below levels projected by President Barack Obama.
The plan by Budget Committee Chairman Kent Conrad, D-N.D., would also allow Democrats later this year to advance legislation on priorities such as taxes, energy and job creation without fear of a Republican filibuster.
The hope is to wrestle the deficit down to $545 billion in five years, in part by aggressively curbing spending on the domestic programs Congress funds each year. The deficit hit a record $1.4 trillion last year.
Like Obama, Conrad would extend middle-class tax cuts passed during President George W. Bush's first term but let those for upper-income taxpayers expire.
But unlike Obama's budget, the plan forecasts tax increases elsewhere in the budget if millions of middle-class taxpayers are to avoid the alternative minimum tax. It also would require tax increases to finance estate tax relief for couples inheriting more than $7 million.
Conrad released only sketchy highlights Tuesday in advance of a two-day panel session that's a precursor to floor debate before Memorial Day.
The annual congressional budget is a nonbinding blueprint for the fiscal year that begins Oct. 1 and sets the parameters for subsequent tax and spending bills that could boost clean energy programs and revive Obama's stalled jobs agenda.
"Our budget plan significantly cuts spending and deficits and takes critical steps to put the nation back on a sound fiscal course," Conrad said. "It includes measures to strengthen the economic recovery. It cuts taxes for the middle class."
The deficit has exploded since the recession began in December 2007 and as the nation endured a financial crisis and bailout of insurance companies, banks and investment houses. Obama inherited a grim deficit situation that was exacerbated by a $862 billion stimulus bill and two rounds of generous spending bills.
Now, as the economy recovers, the administration promises a greater focus on bringing the deficit down to sustainable levels.
Obama's fiscal commission has its first meeting next week. It is charged with coming up with a bipartisan plan to reduce the deficit to about 3 percent of the economy within five years, a level regarded by many economists as sustainable. But the panel is structured in a way that many observers say invites gridlock between Republicans opposing revenue increases and Democrats wary of cutting spending.
Conrad's plan will freeze overall annual spending for domestic agency budgets at current levels for the next three years. It also would allow for a subsequent budget bill that could evade filibuster, just changes to a Senate-passed health care bill were passed last month despite the election of Republican Scott Brown of Massachusetts, who took away the Democrat's filibuster-proof majority.
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