McCaskill seeks budget chairman's support on pay/go

In an effort to tame the growing budget deficit, eight Senate Democrats, led by Sen. Claire McCaskill of Missouri, have introduced pay/go legislation requiring offsets for any new tax and others for mandatory spending bills that would add to the deficit.

"We can't continue spending money we don't have," McCaskill said in a release on Thursday. "Most Americans manage to live on a budget and not spend beyond their means, and the federal government should, too."

CBO reported on Thursday the fiscal year's budget deficit through July reached $1.3 trillion. CBO estimates that it is close to $880 billion greater than the deficit recorded in the 10 months through July 2008.

The House passed a pay/go measure in late July that exempted four broad areas: cutting middle-class taxes, reducing the estate tax, patching the alternative minimum tax and providing higher Medicare payments to physicians.

Supporters of the House measure have said the exemptions are needed because Congress has typically failed to offset these items. By listing exceptions up front, lawmakers would not have to complicate pay/go legislation by waiving those items.

By contrast, the Senate bill does not exempt the tax and Medicare-related measures. That could help win support from Senate Budget Chairman Kent Conrad, D-N.D., who has raised concerns over the House exemptions.

"That is a big improvement," Conrad said on Thursday of the McCaskill bill, adding he has not studied it closely. "I have been a longtime supporter of [pay/go], but not with the exemptions."

McCaskill said she hopes to gain Conrad's support for the measure. She suggested a deal might be struck that includes Conrad's proposal to establish a bipartisan commission on the deficit. The panel would make recommendations to lawmakers on how to cut mandatory programs and other spending while structuring tax policy to bring down the deficit.

Support for the plan has been tempered because of opposition from House Speaker Nancy Pelosi, D-Calif.

"We are working on [Conrad]," McCaskill said. "He just wants his commission. He's worked so long and so hard on it. He is definitely supportive of the concept. We are trying to get him across the line, but we are not there yet."

Senate Republicans dismissed the pay/go bill, contending that Democrats will always find excuses to waive its provisions.

Democrats use pay/go as "political cover," said Senate Budget ranking member Judd Gregg, adding that they end up "violating it with impunity." Sen. Tom Coburn, R-Okla., called pay/go "a farce."