March 10, 2011 / 5:59 PM / 9 years ago

Key senator says more budget cuts inevitable

WASHINGTON (Reuters) - Draconian budget cuts are inevitable unless the White House comes up with a comprehensive plan that includes tax reform and entitlements, U.S. Senate Budget Committee Chairman Kent Conrad said on Thursday.

Conrad said the Senate lacked the votes to sustain spending at current levels, telling senior officials from the State and Defense departments, “There are more cuts coming. You can write it down; it’s going to happen.”

“Those cuts will be more draconian if there is not a comprehensive long-term deal that involves tax reform and the entitlements,” Conrad said as he closed a hearing on the fiscal 2012 budget proposals for the two departments.

The Senate on Wednesday defeated a Republican plan for nearly $60 billion in spending cuts for the rest of this fiscal year, which ends September 30, and a far smaller Democratic alternative, fueling pressure for a bipartisan deal.

A Reuters/Ipsos poll on Wednesday found 51 percent of Americans want defense spending cut, with much weaker support for cutting government retirement and health programs. Only 45 percent thought the Republican proposals to deeply cut domestic, non-defense programs were “essential” to balancing the budget.

Deputy Defense Secretary William Lynn said the Pentagon had already found $178 billion in savings for the next five years by ending unneeded programs and streamlining operations across the board.

Of that total, $78 billion is being used for deficit reduction across the federal government, while $100 billion is to be used for rising Defense Department personnel costs and to fund the modernization of old weapons.

Lynn told the committee the department would continue its efforts, and was still looking for more savings.

But he reiterated that the Pentagon urgently needed a budget to fund its continued operations in fiscal 2011, noting that continuing stopgap measures would leave the department with a $23 billion shortfall that would take a heavy toll on procurement, maintenance and readiness.

Republicans emboldened by congressional election wins last year are at loggerheads with President Barack Obama’s Democrats over how to reduce the budget deficit, due to hit a record $1.65 trillion this year.

Spurred on by Tea Party fiscal conservatives, Republicans want steep spending cuts for this year, but Obama has warned that too much belt-tightening will hurt economic recovery.

Reporting by Andrea Shalal-Esa and Richard Coward; editing by John Wallace

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