Senator: Months, not days needed to pass debt deal

Senator Kent Conrad (D-ND) speaks during a press conference on Capitol Hill

Steve Chiotakis: We're more than a week from the Aug. 2 deadline the Treasury Department says will technically default. Now the President and House Speaker John Boehner have reportedly turned up the heat to get to some sort of deal but are still far apart on the amount of budget cuts and tax increases. Meanwhile the Senate today is expected to vote down the House GOP plan called "cut, cap and balance," a call for a constitutional amendment to balance the budget.

The shape of the debate changed significantly this week when a bipartisan group of senators dubbed the "Gang of Six" unveiled a proposal of their own that would cut $3.7 trillion from the federal budget over the next 10 years while at the same time raising some taxes. North Dakota's Democratic Sen. Kent Conrad is a member of the Gang of Six, and he's with us now to talk about it. Senator, welcome.

Sen. Kent Conrad: Glad to be with you.

Chiotakis: The president says now he's going to support a very short-term solution to raise the debt limit to give Congress a few more days to reach a deal. Is that enough time, or do you think they need more time?

Conrad: Our plan was designed to deal with the debt itself. Our goal was never to be part of extending the debt limit. We've been brought into that discussion because frankly, there's very little appetite in Congress to extend the debt unless the debt itself is dealt with. To get all of what we've worked on enacted, could not be done in just a few days.

Chiotakis: Your plan would cut heavily from healthcare programs such as medicare. Dose this plan cut the deficit on the back of the neediest, do you think, sir?

Conrad: I don't. This is widely distributed pain, which it has to be when we've got the lowest revenue in the last 60 years as a share of our economy, and the highest spending. You referenced the healthcare savings, frankly I think they're relatively modest; $500 billion is a big number, but you've got to remember what's scheduled to be spent, which is well over $10 trillion.

Chiotakis: I know taxes have been a huge sticking point obviously for Republicans. And Sen. Paul Ryan has said that your plan would raise taxes more than $2 trillion over the next 10 years or so. You say your plan would actually lower taxes. How do those two things jive?

Conrad: The difference is the Congressional Budget Office looks at current law, and current law -- all the Bush tax cuts expire at the end of next year. Compared to that plan, we cut taxes $1.5 trillion. Compared to allowing most of the tax cuts to continue, our plan raises $2 trillion.

Chiotakis: If we don't do this right, do you think the momentum goes away to get this done?

Conrad: I frankly don't, because the rating agencies are telling us if we aren't showing serious steps at making progress, dealing with the debt itself, they will downgrade U.S. debt. That would mean higher interest rates, that would mean more debt. The time for kicking this issue down the road is about to come to an end.

Chiotakis: Sen. Kent Conrad of North Dakota. Senator, thank you.

Conrad: You bet.

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