Washington: A US Senate panel approved a $3.7 trillion (Dh13.59 trillion) budget plan that calls for modest steps towards cutting government spending while leaving tougher efforts to reduce the federal deficit to future years.
The plan calls for cutting discretionary spending, the portion of the budget that must be approved each year by Congress, by $9.5 billion. Almost half of those savings would come out of State Department and other international programmes.
The spending blueprint, approved 12-10 by the Senate Budget Committee on Thursday, anticipates next year's deficit will total $1.26 trillion, down from the panel's projection of $1.44 trillion in red ink this year.
With Democrats no longer having the 60-seat "supermajority" needed to end debates by the full Senate, the plan would allow unspecified tax policy changes to be passed by the chamber relying on the same fast-track reconciliation procedure that was used to approve President Barack Obama's health care overhaul.
The budget plan envisions reducing the deficit by 70 per cent, to $545 billion, by 2015 mainly by requiring lawmakers to begin in 2012 financing cuts in the alternative minimum tax and estate taxes with equivalent savings elsewhere. It doesn't call for reductions in quickly growing entitlement programs such as Medicare, leaving that to an independent fiscal commission created earlier this year by Obama.
No ‘self-defeating' move
Senate Budget Committee chairman Kent Conrad, a North Dakota Democrat, said lawmakers didn't want to risk the economic recovery this year with more sweeping spending cuts. "You don't impose pain in the middle of an economic downturn; that would be self-defeating," he said.
Representative Judd Gregg, the top Republican on the panel, called the savings a "drop in the bucket". He also said that "despite massive deficits and debt as far as the eye can see, this budget fails to make any progress on getting the government's spending and borrowing spree under control".
The budget, for the 2011 fiscal year beginning October 1, sets the parameters for Congress's tax-and-spending debate on specific bills funding government agencies. It must be approved by the House and Senate.
House Democratic leaders have suggested they may forgo adoption of the blueprint this year because it would require politically difficult votes.
International spending
The proposals to cut the administration's international spending programmes drew objections from Secretary of State Hillary Clinton and Defence Secretary Robert Gates.
The Senate Finance Committee chairman, Max Baucus, a Montana Democrat who is the chamber's chief tax writer, declined to say yesterday which tax provisions could be approved through reconciliation, which would allow Democrats to pass them in the Senate with a simple majority.
Democrats control the chamber with 59 votes. "I have some ideas," said Baucus, adding "we don't even have a budget yet" and "we're getting way ahead of ourselves."
