Democrats Raise Stakes on Budget

By JANET HOOK
WSJ

WASHINGTON—Senate Democratic leaders, seeking to break an impasse over Republican-backed spending cuts, on Tuesday proposed broadening the scope of budget negotiations into more politically volatile terrain that includes taxes, subsidies and entitlement programs.

Senate Majority Leader Harry Reid (D., Nev.) said that efforts to bridge the parties' $50 billion difference in proposed budget cuts for the remainder of fiscal-year 2011 could reach beyond domestic discretionary spending and move into tax policy and programs such as farm subsidies.

"There are other places we can move to bring about some cost savings,'' Mr. Reid said. "Domestic discretionary, defense, mandatories, revenues."

Sen. Charles Schumer (D., N.Y.) is expected to echo that suggestion in a speech Wednesday and argue that tens of billions of dollars of deficit-reduction measures could be found if budget talks are broadened.

Republicans reacted coolly to the idea. They said weren't ready to expand the parameters of the debate on spending for the fiscal year that ends Sept. 30 to tackle bigger budget problems.

(More here.)