Can Sides Reach Deal to Cut Federal Spending?

Can Sides Reach Deal to Cut Federal Spending?

Budget negotiations continue at White House and in the Senate.

The bipartisan team of negotiators working with Vice President Joseph Biden to cut federal spending wants to develop a package to cut $4 trillion over a decade. The Vice President says it has to be real with a down payment and a believable path to getting to that $4 trillion figure. The Vice President says that so far some of the tentative horse-trading involved focuses on cutting smaller deals that are contingent on reaching a larger deal on tougher items like revenue. Negotiators will meet four times this week.

House Budget Committee Ranking Member Chris Van Hollen, D-Md., says the talks still have a long way to go and it's not yet clear whether they can bridge the gap that exists between the two sides. Democrats continue to say that a larger deal must include revenue and Van Hollen says he was encouraged that Senate Republicans seem willing to do away with some tax subsidies.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., is keeping close tabs on negotiations and says that the House-passed budget cuts for agriculture and nutrition will not pass in the Senate.

The Senate budget proposal is still being worked on. Senator Kent Conrad, D-N.D., chairman of the Senate Budget Committee, says the latest version of a fiscal 2012 Senate budget resolution would cut the deficit by some $4 trillion over a decade, largely through reliance on eliminating tax breaks. The plan calls for raising revenue by about $2 trillion through eliminating tax expenditures and a combination of cuts in government programs and the savings from reduced interest payments on the debt would reduce the deficit another $2 trillion.

The plan no longer includes a millionaire's surtax. Senator Bernard Sanders, I-Vt., threatened to block Conrad's original proposal because he said it favored the rich at the expense of the poor. Conrad backed off saying if a wide variety of loopholes that the wealthy and large corporations benefit from come to an end he can live with not having a millionaire's surtax.

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