Dems' budget proposal in holding pattern

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WASHINGTON, May 20 (UPI) -- U.S. Senate Majority Leader Harry Reid nixed a spending cuts-only demand by House Speaker John Boehner, saying closing tax loopholes must be part of the mix.

Republicans have turned aside using tax reform to corral deficits as Congress and the White House try to break a standoff over increasing the country's debt limit by Aug. 2 to avoid a federal default, the Los Angeles Times reported Thursday.

Boehner's office reiterated Thursday tax hikes won't be part of any deficit- or debt-reduction talks.

"You can't do $2 trillion just in cuts," the Nevada Democrat told the Times. "There has to be a mix of spending cuts, including defense. There has to be a more fair apportionment of tax policy in this country."

Boehner, R-Ohio, earlier this month demanded $2 trillion in budget cuts in exchange for raising the government's debt ceiling.

"That certainly would be a big, big number," Reid, D-Nev., told the Times Thursday. "But you know these are numbers that are not impossible -- if you do savings with the Pentagon, in addition to domestic discretionary [accounts] and rearrange the tax stuff. That's all doable. Whatever we do is going to have to, in my opinion, be substantial," Reid said.

Reid's comments came as Senate Budget Committee Chairman Kent Conrad, D-N.D., said Democrats will wait until White House-led deficit talks end before offering a 2012 budget plan

Republicans said Conrad's announcement Thursday was an excuse since Democrats haven't reached agreement within their caucus on an alternative to the House-passed GOP plan, The Hill reported.

Conrad said Democrats on the Budget Committee were "very close" to an agreement.

"We will have a budget. But, after broad consultation, we have decided to defer a budget markup because of the high-level bipartisan leadership negotiations that are currently under way," Conrad said.

The committee chairman said results of the negotiations, led by Vice President Joe Biden, may have to be included in the party's proposal.

Sen. Jeff Sessions, R-Ala., the committee's ranking Republican, criticized Conrad's announcement.

"It seems Senate Democrats are desperately trying to avoid having to present a budget to the American people," Sessions said. "They know that the big spenders in their caucus prevent them from bringing forward a credible plan that both their party and the country can support."