Senator releases budget resolution in advance of markup

Senate Budget Committee Chairman Kent Conrad, D-N.D., on Tuesday released his fiscal 2011 budget resolution, which includes a $4 billion cut from President Obama's discretionary spending request; a reduction of the deficit to 3 percent of gross domestic product by fiscal 2015, and reconciliation instructions to the Finance Committee to reduce the deficit by $2 billion in fiscal 2011.

Under the spending plan, the $4 billion cut would come from State Department and other international programs, Conrad said, ahead of a markup that begins Wednesday and is expected to wrap Thursday.

Conrad could not say when such a resolution would be considered on the floor, given the Senate's legislative calendar.

Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, said Tuesday he is concerned about the proposed cut, given that State is playing a larger role in Iraq and Afghanistan. He added that it would be ultimately up to the Appropriations Committee to decide whether to cut the $4 billion from international programs or from other programs.

Conrad also said appropriators will have to make up for a $5.5 billion shortfall in funding for Pell Grants in fiscal 2011. Conrad said the shortfall stems from Congress' rejection of a proposal in Obama's budget to completely fund Pell Grants from mandatory spending.

Conrad said that the requirement that the alternative minimum tax be paid for after the first two years of the five-year budget window is a primary factor that allows his budget to get the deficit to 3 percent of GDP by fiscal 2015. The estate tax would also have to be offset after two years.

Conrad said that, despite the Senate's historical inability to pass legislation paying for the AMT, "I think it is absolutely realistic; there is not going to be any alternative given what this calls for and given the state of our finances."

Conrad said his spending plan includes net tax relief of $780 billion over the five years of the plan, targeted largely to the middle class. It reflects the permanent extension of the 2001 and 2003 income tax provisions for couples with incomes below $250,000 and singles with income below $200,000.

The resolution also provides for continuing through 2011 expiring tax provisions, such as the research and development tax credit; deduction for state and local sales taxes, and a range of energy incentives. It also includes provisions to promote small business investment, manufacturing, and infrastructure. Meanwhile, Sen. Russ Feingold, D-Wis., Tuesday said he plans to offer an amendment to the budget resolution that would call on Congress to pay for additional cost of the wars in Iraq and Afghanistan over 10 years.

"A massive, open-ended military strategy for Afghanistan not only puts American lives at risk needlessly and hurts our efforts to combat al-Qaida globally, but it also continues to pile on to our massive debt," Feingold said in a release. "President Obama has said he would start putting the Afghanistan and Iraq wars on the books, instead of the shell game we saw under President Bush. But simply including the war costs in the budget does not require us to actually pay for them. If the president and the Congress choose to continue these wars, they should at least find a way to pay for them."