May 1 (Bloomberg) -- A bipartisan group of lawmakers attempting to hash out a plan to reduce the government’s budget deficits has made “enormous” progress and may be able to present a proposal soon, Senate Budget Committee Chairman Kent Conrad said.
Conrad, a North Dakota Democrat and a member of the so- called “Gang of Six,” said on “Fox News Sunday” that the group needs to reach agreement soon to have an impact on the debate about what spending changes are needed to win approval for increasing the federal debt limit.
“We’ve made enormous progress in that group and I hope that we’re able to announce an agreement soon; if we don’t we’re simply not going to be relevant because this debate marches on,” Conrad said. “I’ve spent five months in this negotiation. I wouldn’t have spent all this time if I didn’t think there was a serious chance of reaching an agreement.”
He declined to describe the elements of the plan under consideration.
Congress returns to work this week from its Easter recess facing a vote to raise the government’s $14.3 trillion debt limit, which the Treasury has said will be necessary by early July. A number of lawmakers in both parties said they won’t vote for the increase without major cuts in the government’s budget.
House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, said he doubted lawmakers would reach an agreement on a comprehensive plan to fix the budget.
No ‘Grand Slam’
“We’re probably not going to get some grand-slam agreement that fixes all of these problems,” he said on ABC’s “This Week with Christiane Amanpour.” Using a baseball analogy, Ryan said his hope now “is to get a single or a double, to get something done that gets us on the right path.”
On NBC’s “Meet the Press,” New York Mayor Michael Bloomberg said Democrats and Republicans must understand that balancing the federal budget will involve a combination of spending cuts and increased revenue.
“We need leadership in the front,” Bloomberg said. “We need politicians to come forward and say this is in the interest of the country.” Bloomberg is the founder and majority owner of Bloomberg News parent Bloomberg LP.
Minnesota Republican Representative Michele Bachmann, a supporter of the anti-tax, anti-government Tea Party movement, said that, while she generally backs Republican budget plans, she has “put an asterisk” on her support for proposed cuts in the Medicare health program for the elderly.
“One position I’m concerned about is shifting the cost burden to senior citizens,” Bachmann said on the “Fox News Sunday” program. “Seniors are saying, ‘Look, I’m not in a position to be able to handle that.’ I also share that real fear. That’s why I put the asterisk out there.”
Amid debate about the deficit in Washington, bond market yields in the U.S. are lower now than when the government was running a budget surplus a decade ago, even though Treasury Department data show that the amount of marketable debt outstanding has risen to more than $9 trillion from about $4.3 trillion in mid-2007. The yield on the benchmark 10-year note is below the average of 5.48 percent in 1998 through 2001, the last time the U.S. had a budget surplus, according to Bloomberg Bond Trader prices.
Ten-year yields declined two basis points, or 0.02 percentage point, to 3.29 percent on April 29 and touched 3.28 percent, the least since March 23, according to Bloomberg Bond Trader prices. They fell 18 basis points in April in the first monthly drop since sliding 44 basis points in August, and slid 10 basis points last week.
The nonpartisan Congressional Budget Office projects annual interest payments on the debt will more than quadruple over the coming decade to more than $900 billion, topping the budget for the Defense Department and becoming one of the single biggest expenditures in the federal budget.
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