Klobuchar defends Democratic approach on budget

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Sen. Amy Klobuchar
U.S. Sen. Amy Klobuchar, D-Minn., on Capitol Hill in Washington in a file photo from March 2, 2010. Klobuchar is seeking her second term in the Senate.
AP Photo/Harry Hamburg

Republicans spent much of the weekend criticizing U.S. Sen. Amy Klobuchar at their convention in St. Cloud. They argue that Klobuchar's policies are sending the country down the wrong economic path.

Indeed, state Rep. Kurt Bills, who won the Minnesota Republican Party's endorsement for U.S. Senate on Friday and will face Klobuchar in the November election, said, "We can't afford 'Klob-bama-nomics.'"

But while Klobuchar's Republican opponents accuse her of letting spending get out of control, she is quick to point out that she has supported some pretty big spending cuts.

"We have got started on that with $2.2 trillion in debt reduction that I voted for as part of the Budget Control Act," Klobuchar said.

The Budget Control Act is the bipartisan deal that resulted from last summer's standoff over increasing the nation's borrowing limit. The legislation also includes automatic cuts to military spending on Jan. 1, unless Congress intervenes.

Klobuchar thinks there's even more room to cut the Pentagon's budget -- especially as Congress keeps authorizing weapons systems the military doesn't want.

But along with those cuts, she said, tax revenues need to rise and the wealthiest need to chip in more.

"I've long supported keeping the Bush tax cuts in place for the middle class," Klobuchar said. "But [with higher taxes] for people making over -- you can set it over a million a year or over $250,000 a year if you go to the Clinton levels -- you can save over $700 billion."

In addition to tax rates, Klobuchar also wants to close tax loopholes to raise more money for the government. One place she wants to start is the home mortgage interest deduction. She proposes limiting the deduction to the first $500,000 in home value.

"So if you go out and buy a million-dollar home, you still get the mortgage tax deduction, but you get it up to $500,000 in value to the home," she said. "That saves $215 billion over 10 years."

Klobuchar also thinks one industry in particular should be paying more in taxes.

"Just think about this: Some of the most profitable companies in the country, oil companies, they are still getting subsidized," she said. "While biofuels went away, they are still getting subsidized. That's $40 billion a year. That is revenue."

Klobuchar said she also shares some Republicans' goals to simplify the tax code and lower tax rates for corporations.

Another serious issue she cites is Medicare, the health insurance program for seniors.

"I've long supported keeping the Bush tax cuts in place for the middle class."

The program's costs are rising rapidly as baby boomers grow older. But unlike many Republicans, Klobuchar doesn't think Medicare's benefits need to be cut.

"I'm not talking about cutting Medicare, that so many of these budgets talk about," she said. "They talk about actually cutting out Medicare, a number of them would end Medicare, which makes no sense to me. It's been one of the best programs for our seniors."

Instead, Klobuchar would like to see the Medicare program negotiate with pharmaceutical companies to obtain a better price for prescription drugs.

That could save as much as $240 billion over the next decade, she said.

The other big entitlement program that some in Congress want changed is Social Security. With members of the baby boom generation retiring, the program spends more money than it takes in.

Klobuchar said wealthier taxpayers should chip in a bit more to keep the program strong.

"You could do things like look at the Social Security tax that ends at something like $106,000 in income and put it back in at $250,000 and above," she said. "That keeps it solvent."

Klobuchar said the only way the country's fiscal problems will be solved is if both parties work together -- as she said the Senate has done recently on a variety of bills ranging from highway programs to an overhaul of the postal service.

"You can march down the number of bills that have gotten done with people on the right and on the left opposing them but people in the middle going forward," she said. "That is the same coalition that we are going to need to get our debt reduced."

Implicit in Klobuchar's her argument is that she can work across the aisle in ways her Republican opponent would not.