By JAMES ROSEN
September 29, 2006
Conrad and Rep. John Spratt, ranking Democrat on the House Budget Committee, sharply criticized Republicans for failing to adopt a budget or to pass any of the 12 annual appropriations bills.
"We face red ink as far as the eye can see, with the nation's debt continuing to grow out of control," Conrad told reporters at the Capitol. "The debt is skyrocketing, and there's been a failure among the Republicans themselves to arrive at a budget."
Conrad responded cautiously when asked whether Democrats would extend the tax cuts that Congress passed in 2001 and 2003 if they gain control of the House of Representatives or the Senate in the Nov. 7 elections.
The North Dakota Democrat said his party would likely retain "middle-class tax cuts" such as the child tax credit started under President Clinton and the repeal of the "marriage tax penalty" enacted under Bush.
But the senator added that Democratic lawmakers might have to revisit the broader income tax reductions that Bush pushed through Congress during his first 30 months in office.
"Maybe some of the tax cuts that go to the wealthiest among us are going to have to get trimmed because, you know, we've got to pay our bills," Conrad said.
A broad series of disputes, some of them among Republicans, has stymied movement of the 12 appropriations bills, which fund most government programs. The Senate has passed only the defense and homeland security spending measures, with more progress possible during a lame-deck session later this year after the elections.
Federal spending is projected to increase this year by 9 percent to about $2.7 billion, according to the White House budget office. It's the largest percentage increase since 1990.
While Conrad and Spratt, a South Carolina Democrat, said the budget surplus Bush inherited in January 2001 has turned into a sizable deficit, their figures show that the deficit is shrinking, from a high of $413 billion in 2004 to a projected $260 billion this year.
Tony Fratto, White House deputy press secretary, said strong economic growth is fueling increased federal tax receipts, which are helping reduce the deficit.
Bush's pledge to cut the deficit in half by 2009, Fratto said, is being fulfilled ahead of schedule.
"We're bringing the deficit down from where anyone would have anticipated it would have been," he said. "We inherited a recession and a collapsing equity market, and the impacts of those and September 11th and the corporate scandals were really shocks to the economy. Then having to deal with the war on terror - it's all obviously had an impact on necessary spending and on tax receipts."
Spratt said the accumulated federal debt has increased from almost $6 trillion when Bush took office to almost $9 trillion this year, with an increasing share - now more than $2 trillion - held by foreign countries and other overseas investors.
"Foreigners are amassing more and more of our debt and therefore control over our fiscal and financial future," Spratt said.
Scripps Howard News Service, http://www.shns.com
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