Published March 23, 2013
WASHINGTON – An exhausted Senate approved its first budget in four years early Saturday, calling for almost $1 trillion in tax increases over the coming decade while sheltering safety net programs targeted by House Republicans.
While their victory was by a razor-thin 50-49, the vote let Democrats tout their priorities. Yet it doesn’t resolve the deep differences the two parties have over deficits and the size of government.
The nonbinding but politically symbolic measure caters to party stalwarts on the liberal edge of the spectrum just as the House GOP measure is crafted to appeal to more recent tea party arrivals.
Late Friday afternoon, the Senate then began a marathon session of votes on dozens of amendments to the 2014 budget proposal. Many of the proposals were offered in hopes of inflicting political damage on Democratic senators up for re-election in GOP-leaning states like Alaska and Louisiana.
The two main budget proposals produced by Senate Democrats and House Republicans are miles apart. The Senate plan does not attempt to balance the budget at all, though it does claim to reduce the deficit by imposing nearly $1 trillion in tax increases on top of more than $600 billion in higher taxes on top earners enacted in January. It also includes $875 billion in spending cuts, generated by modest cuts to federal health care programs, domestic agencies and the Pentagon and reduced government borrowing costs.
The House plan — by House Budget Committee Chairman Paul Ryan, R-Wis., his party’s vice presidential candidate last year — claims $4 trillion more in savings over the period than Senate Democrats by imposing major cuts in Medicaid, food stamps and other safety net programs for the needy. It would also transform the Medicare health care program for seniors into a voucher-like system for future recipients.
“We have presented very different visions for how our country should work and who it should work for,” said Sen. Patty Murray, D-Wash., who chairs the Senate Budget Committee. “But I am hopeful that we can bridge this divide.”
Congressional budgets are planning documents that leave actual changes in revenues and spending for later legislation, and this was the first the Democratic-run Senate has approved in four years. That is testament to the political and mathematical contortions needed to write fiscal plans in an era of record-breaking deficits that until this year exceeded an eye-popping $1 trillion annually, and to the parties’ profoundly conflicting views.
“I believe we’re in denial about the financial condition of our country,” Sen. Jeff Sessions of Alabama, top Republican on the Budget panel, said of Democratic efforts to boost spending on some programs. “Trust me, we’ve got to have some spending reductions.”
Though the shortfalls have shown signs of easing slightly and temporarily, there is no easy path to the two parties finding compromise — which the first months of 2013 have amply illustrated.
Already this year, Congress has raised taxes on the rich after narrowly averting tax boosts on virtually everyone else, tolerated $85 billion in automatic spending cuts, temporarily sidestepped a federal default and prevented a potential government shutdown.
By sometime this summer, the government’s borrowing limit will have to be extended again — or a default will be at risk — and it is unclear what Republicans may demand for providing needed votes. It is also uncertain how the two parties will resolve the differences between their two budgets, something many believe simply won’t happen.
Both sides have expressed a desire to reduce federal deficits. But President Barack Obama is demanding a combination of tax increases and spending cuts to do so, while GOP leaders say they won’t consider higher revenues but want serious reductions in Medicare and other benefit programs that have rocketed deficits skyward.
Obama plans to release his own 2014 budget next month, an unveiling that will be studied for whether it signals a willingness to engage Republicans in negotiations or play political hardball.
In a long day that began Friday morning, senators plodded through scores of amendments — all of them non-binding but some delivering potent political messages.
They voted in favor of giving states more powers to collect sales taxes on online purchases their citizens make from out-of-state Internet companies, and to endorse the proposed Keystone XL pipeline that is to pump oil from Canada to Texas refineries.
They also approved amendments voicing support for eliminating the $2,500 annual cap on flexible spending account contributions imposed by Obama’s health care overhaul, and for charging regular postal rates for mailings by political parties, which currently qualify for the lower prices paid by non-profits.
In a rebuke to one of the Senate’s most conservative members, they overwhelmingly rejected a proposal by Sen. Rand Paul, R-Ky., to cut even deeper than the House GOP budget and eliminate deficits in just five years.
The Democratic budget envisions $975 billion in unspecified new taxes over the coming 10 years. There would be an equal amount of spending reductions coming chiefly from health programs, defense and reduced interest payments as deficits get smaller than previously anticipated.
This year’s projected deficit of nearly $900 billion would fall to around $700 billion next year and bottom out near $400 billion in 2016 before trending upward again.
Shoehorned into the package is $100 billion for public works projects and other programs aimed at creating jobs.