Senate budget chief nixes debt package

WASHINGTON, June 22 (UPI) -- The chairman of the U.S. Senate Budget Committee has indicated his displeasure with a package of more than $2 trillion in debt-reduction by 2021.

Democratic Sen. Kent Conrad of North Dakota said a greater amount is needed to stabilize borrowing, re-energize the economy and avert the threat of a debt crisis, The Washington Post reported Wednesday.

"A $2 trillion package sounds big," Conrad said, "but I think most serious observers would tell you that it takes a package of at least $4 trillion to fundamentally change the trajectory we're on."

He said $2 trillion over 10 years will not do the job with a debt of nearly $15 trillion that is headed to $25 trillion.

The Congressional Budget Office Wednesday released its analysis showing public debt will reach 70 percent of the nation's gross domestic product by the end of fiscal 2011. The figure for 2010 was 62 percent.

In a second forecast, the CBO's figures showed debt reaching 190 percent of GDP by 2035 if Bush era tax rates are continued, The Hill reported. If the tax cuts expire and Medicare entitlements are slashed, federal debt would rise from an estimated 69 percent of GDP this year to 84 percent in 2035.

Bipartisan negotiators led by Vice President Joe Biden are working on drafting a debt-reduction package by Aug. 2 that will persuade reluctant lawmakers to raise the legal limit on government borrowing.

Without additional borrowing authority, the government could default on its obligations beginning Aug. 2.

Some Republicans suggested a scaled-back, short-term debt deal but the move was rejected by House Majority Leader Eric Cantor, Politico reported.

"I don't see how multiple votes on a debt ceiling increase can help get us to where we want to go," Cantor said Tuesday. "It is my preference that we do this thing one time."