Senate Budget Chairman Kent Conrad (D-N.D.) could mark up a 2012 budget for the upper chamber as soon as next week, giving Democrats an alternate way to navigate the volatile spending debate while stoking new questions over how tax reform might affect the oil industry.

Conrad told reporters today that he would aim for $4 trillion in deficit reduction over 10 years as part of his 2012 blueprint. The Associated Press later reported that the soon-to-retire North Dakotan would seek as much as $1 trillion in revenue from a sweeping simplification of the tax code that lowers overall rates.

That move, if Conrad can pull it off, could call Republicans' bluff on the future of oil and gas tax benefits that the White House has been pushing to eliminate amid a political furor over industry profits (E&E Daily, May 2). Both House Majority Leader Eric Cantor (R-Va.) and House Budget Chairman Paul Ryan (R-Wis.) said last week that they could support killing the tax breaks as part of a broad reform effort that closes loopholes while bringing down companies' tax bills.

Not every Republican shares that view. Asked about the oil-benefits debate, Conrad's ranking member on the budget panel yesterday was cool to arguments that streamlining the tax code could lower effective rates.

"[I]f you take the corporate tax rate -- it's now the highest in the developed world -- and if you bring it down by eliminating deductions, then it's hard for me to see that you've gotten a tax reduction," Sen. Jeff Sessions (R-Ala.) said. "You've gotten a tax simplification, is what you've gotten."

Sessions delivered a pre-emptive strike against the Democratic budget yesterday after hearing from Conrad that the 2012 measure could head to a markup as soon as Monday.

Noting that Senate Republicans had asked for 72 hours to review the budget before its markup in committee, Sessions said the "very unsatisfactory" current timeframe "indicates to me that it'll be a partisan budget ... with an effort made to conceal" tax increases. But Conrad's office echoed the senator in stating that Monday is a goal date, not set in stone, and that more details would be released later in the week.

Senate Majority Leader Harry Reid (D-Nev.) last week said he plans to call an upper-chamber vote on Ryan's 2012 budget, which centers on a sweeping conversion of Medicare for younger beneficiaries from a guaranteed entitlement into a direct payment for insurance purchasing.

House Democrats, all of whom voted against the Ryan budget on April 15, are honing a new message that pairs that Medicare shift with a GOP vote against repealing the oil tax breaks to slam Republicans as sacrificing senior citizens' health care to help fossil-fuel producers.

Conrad yesterday said his budget would not change Social Security and exact "modest savings" from Medicare.

The House GOP budget also proposes significant long-term cuts to nondefense energy and environmental programs at the Department of Energy as well as U.S. EPA. Conrad has yet to indicate how his plan would address those discretionary spending programs.

Reporter Emily Yehle contributed.