On Fox News Sunday this morning, Senator Kent Conrad of North Dakota outlined a compromise between the president’s and the House speaker’s previous “grand bargain” deals to avoid the fiscal cliff. Downplaying the alternative the president proposed yesterday as a basic measure to avert the worst of the cliff’s effects, Conrad insisted that the current situation is “an opportunity to do something great for our country.”
The numbers he proposed: $1.45 trillion in spending cuts, to split the difference between Speaker Boehner’s and President Obama’s proposals, and a similar median number on revenue, $1.15 trillion, for a “combination of $2.6 trillion. You couple that with the $1.1 trillion that’s already been done [in the Budget Control Act] and you’re at $3.7 trillion.”
He admitted, “Is it perfect? No. Is it everything we’d hoped for? No. Does it match what Bowles-Simpson did? No. On an even comparison, Bowles-Simpson would be $5.3 trillion.”
Wallace then prompted him, “are you saying you don’t like the president’s plan?” Conrad, indeed, didn’t sound too fond of the president’s final proposal, saying, “It may come to that, but I would hope that we would have one last attempt here to do what everyone knows needs to be done, which is a larger plan that really does stabilize the debt and get us moving in the right direction.”
It’s important to note, however, that it’s unclear if Conrad’s proposal would meet the administration’s mercurial definition of “balance”; White House press secretary Jay Carney, following Boehner’s proposal last week of $1 trillion in spending cuts and $940 billion in revenue, declared that he still had not seen a balanced proposal from Republicans. Conrad’s plan has more spending cuts relative to tax increases than Boehner’s did — crucially, however, it does include higher revenue estimates in absolute terms, which may be of some appeal to the president.
In response, his counterpart on the panel Senator Barrasso noted that he believes the president sees a “political victory at the bottom of the cliff,” and would therefore be uninterested in a grand bargain that averts it.
As a final note, Conrad also made the intriguing deficit-neutral proposal of permanently patching the Alternative Minimum Tax (indexing it for inflation, essentially) and “paying for it” with the drawdown of “overseas contingency operations.” He admitted that the latter is indeed a “spending fiction,” but labeled the former a “revenue fiction” as well — as in revenue forgone which no one expected would be collected anyway, nor should it be (since the AMT is not intended to encompass more and more taxpayers every year merely because current law does not index it for inflation).