One budget plan to cut deficit would raise income taxes

WASHINGTON – A top Senate Democrat Tuesday outlined a budget plan to cut the deficit below levels projected by President Obama.

The plan by Budget Committee Chairman Kent Conrad, D-N.D., would also allow Democrats later this year to advance legislation on priorities such as taxes, energy and job creation without fear of a Republican filibuster.

The hope is to wrestle the deficit down to $545 billion in five years, in part by aggressively curbing spending on the domestic programs Congress funds each year. The deficit hit a record $1.4 trillion last year.

Like Obama, Conrad would extend middle-class tax cuts passed during President George W. Bush’s first term but let those for upper-income taxpayers expire.

But unlike Obama’s budget, the plan forecasts tax increases elsewhere in the budget if millions of middle-class taxpayers are to avoid the alternative minimum tax. It also would require tax increases to finance estate tax relief for couples inheriting more than $7 million.

Conrad released only sketchy highlights Tuesday in advance of a two-day panel session that’s a precursor to floor debate before Memorial Day.

The annual congressional budget is a nonbinding blueprint for the fiscal year that begins Oct. 1 and sets the parameters for subsequent tax and spending bills.

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