Senate Democrat offers alternative budget

A top Democrat in the Senate announced a budget blueprint Tuesday that would scrap President Obama’s signature tax cut after 2010 and blend sleight of hand with modest restraint on domestic programs to cut the deficit to sustainable levels.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) promises to reduce the deficit from a projected $1.7 trillion this year to $508 billion in 2014. The Senate plan would make Obama’s “Making Work Pay” tax credit expire at the end of next year. Those tax credits, part of Obama’s stimulus package, are to deliver $400 to most workers and $800 to most couples.

Conrad, who has for decades sought to highlight the dangers of permanent deficits and rising government debt, produced a budget plan bristling with both -- even after proposing to require wealthier taxpayers to pay higher rates on income and capital gains.

But Democrats point out that Obama inherited an unprecedented fiscal mess caused by the recession and the taxpayer-financed bailout of Wall Street. Rather than retrenching, however, they still promise to award big budget increases to education and clean-energy programs, while assuming that Obama’s plans to overhaul the U.S. healthcare system are successful.

“The best way to bring our deficit down in the long run is . . . with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest,” Obama said in a Tuesday night news conference.

On the $400 to $800 tax credits, White House Budget Director Peter R. Orszag noted that they would be in place for two years, giving the administration and Congress time to find ways to extend them.

But it’s also becoming clear that Obama’s controversial global warming initiative has experienced a setback, as neither House nor Senate Democrats are directly incorporating Obama’s controversial cap-and-trade initiative into their budget plans.

The developments come on the eve of debate in the House and Senate budget committees as they take the first steps to pass Obama’s $3.6-trillion budget plan for the fiscal year starting in October.

House Budget Committee Chairman John M. Spratt Jr. (D-S.C.) will unveil his companion plan today.

Conrad’s plan was released after new Congressional Budget Office estimates that predicted Obama’s plan would produce alarming amounts of red ink -- $9.3 trillion over 10 years and a deficit of $749 billion in 2014. Obama’s budget promises a $570-billion deficit in that year, and to get below that figure Conrad was forced to make a series of difficult choices.

“When you lose $2.3 trillion, you have to pay for things,” Conrad said. “You have to cut things.”