In outlining his proposal to reduce the federal budget deficit, the Democratic chairman took on Republicans. But, Sen. Kent Conrad, also implicitly pushed back against President Obama by seeking to take Social Security off the bargaining table.
Although Obama last week expressed a willingness to bargain over the federal retirement program as part of the ongoing debate over deficit reduction, “Social Security need not be, should not be part of a deficit reduction plan,” Conrad declared Monday on the Senate floor, as he finally unveiled his proposals to deal with the federal deficit.
Any effort to reform Social Security should be done “separately,” he says.
“Savings on Social Security ought to be for the purpose of extending the solvency of Social Security,” Conrad adds.
His stance is significant because Conrad is a moderate-to-conservative Democrat who represents the usually red state of North Dakota.
He has been working for weeks to craft a deficit-reduction proposal in the midst of the current high-stakes negotiations between Obama and congressional Republicans. Conrad has said that his plans hold the support of all of the Democratic-aligned members of his budget panel, including left-leaning independent Sen. Bernie Sanders of Vermont.
Conrad says his plan cuts the deficit and simply brings federal spending in line with levels seen during the presidency of Republican Ronald Reagan.
“Under the plan of Senate Budget Committee Democrats, we get spending to the exact same level that pertained during the administration of Ronald Reagan. During Ronald Reagan’s 8 years, spending averaged 22.1 percent of GDP. That is precisely what our spending equals in the budget framework I have outlined here today,” he says.
The chairman says he would extend tax cuts enacted under President George W. Bush for singles earning up to $500,000 a year and for couples earning up to $1 million a year.
“So 99 percent of the American people will see no rate increase — none; 99 percent of the American people will see no rate increase. One percent will, and it will be those who are sufficiently fortunate to be earning over $1 million a year — the top 1 percent in this country,” Conrad says. “We ask them to go back to rates of the Clinton era, when the top rate was 39.6 percent, capital gains were 20 percent. Those are the rates that pertain — when we had the longest economic expansion in our nation’s history. For those who say it is a job killer, they have to explain how that can be since history shows something quite different from their claim.”
President Bill Clinton presided over the longest peacetime economic expansion in U.S. history.
Most Americans actually see a tax cut under his plan, Conrad says.
Despite the progress he has made in his plan, Conrad says he and his fellow Democrats on the Budget Committee are “under no illusions” given the current budget talks between the White House and Republican leaders, who have demanded trillions of dollars in federal budget cuts if they are to allow a needed vote to raise the federal debt limit ahead of an expected August 2 default by the government. Those negotiations largely have been in a stalemate, with Republicans refusing to consider anything they consider to be tax increases, particularly increases on the wealthiest Americans.
“We know this is a year in which the normal process is not being followed. We understand there are leadership negotiations at the highest level, so we understand this is not going to be dealt with in the normal course of doing business,” he says. “We understand there is leadership negotiation, but we believe there are some ideas in this package that deserve consideration as those negotiations go forward.”
Scott Nance is the editor and publisher of the news site The Washington Current. He has covered Congress and the federal government for more than a decade.