Senate passes first budget in four years but major battles loom
Pre-dawn 50-49 vote passes Senate budget at odds with House fiscal blueprint as Obama prepares his own proposals
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The US Senate passed a budget for the first time in four years on Saturday after an early morning vote that saw victory for the Democrats by the narrowest possible margin. The move matches the passing of a vastly different budget, drawn up by the fiscal conservative Paul Ryan, in the Republican-controlled House of Representatives.
Now the sides must try to thrash out the differences between the two proposals in negotiations in April that appear far from guaranteed to succeed.
The budget that the Senate endorsed only just succeeded in getting passed. A final vote of 50 votes to 49 came in just after 5am. A group of conservative Democrats – Max Baucus of Montana, Mark Begich of Alaska, Kay Hagan of North Carolina and Mark Pryor of Arkansas – joined the entire Republican caucus in voting against it. All four dissenting Democrats face tough re-election battles next year.
The Senate had not passed a budget resolution since 2009 because of fiscal policy disputes with Republicans that forced Congress to turn to numerous stop-gap spending measures, in order to avoid government shutdowns. Neither of the new budgets would be passed by the opposing chamber and each gives a very different ideological platform from which to put forward its vision of the future of government in America.
The Democrats' plan aims to reduce deficits by $1.85tn over 10 years, through an equal mix of tax increases and spending cuts. It includes unspecified tax rises worth about $975bn. The Republican plan seeks $4.6tnin savings over the same period, without raising new taxes. It aims to reach a small surplus by 2023 through deep cuts to healthcare and social programs that aid the poor.
The Senate Budget Committee chairman, Patty Murray, said she intended to try to unite the two budgets but acknowledged the serious problems that lie ahead. "While it is clear that the policies, values, and priorities of the Senate budget are very different than those articulated in the House budget, I know the American people are expecting us to work together to end the gridlock and find common ground, and I plan to continue doing exactly that," she said.
The Senate's top Republican, Kentucky senator Mitch McConnell, immediately hit back. "This budget is a rehash of the extreme policies that continue to hobble the economy and crush the middle class," he said in a statement, noting that the budget would not become law.
President Barack Obama intends to release his own budget vision for 2014 next month, in a move that may go some way to uniting the two proposals so far. In a statement on Saturday, the White House said it was "encouraging that both the Senate and House have made progress by passing budgets through regular order".
But in an indication of entrenched party positions, the statement noted: "The House Republican budget refuses to ask for a single dime of deficit reduction from closing tax loopholes for the wealthy and the well-connected but instead makes deep cuts to education and manufacturing while asking seniors and the middle class to pay more. That is not an approach we support and it is not and approach the majority of the American people support."
The looming debates over the budget come as America faces yet another fierce battle over raising its debt ceiling. The measure used to be routine, allowing the US access to international capital markets in order to fund itself. But it has recently become a focus of intense political horse-trading as Republicans use the threat of a no vote to extract concessions on cutting government spending. Any failure to raise the debt ceiling could result in a US default on its financial obligations – potentially triggering a major global fiscal crisis.
http://dailycaller.com/2013/03/23/senate-democrats-pass-1-trillion-in-new-taxes/
Senate Democrats pass $1 trillion in new taxes
WASHINGTON (AP) — An exhausted Senate gave pre-dawn approval Saturday to a Democratic $3.7 trillion budget for next year that embraces nearly $1 trillion in tax
increases over the coming decade but shelters domestic programs targeted for cuts by House Republicans.
increases over the coming decade but shelters domestic programs targeted for cuts by House Republicans.
While their victory was by a razor-thin 50-49 vote, it allowed Democrats to tout their priorities. Yet it doesn’t resolve the deep differences the two parties have over deficits and the size of government.
Joining all Republicans voting no were four Democrats who face re-election next year in potentially difficult races: Sens. Max Baucus of Montana, Mark Begich of Alaska, Kay Hagan of North Carolina and Mark Pryor of Arkansas. Sen. Frank Lautenberg, D-N.J., did not vote.
White House spokesman Jay Carney praised the Senate plan, saying in a statement it “will create jobs and cut the deficit in a balanced way.”
While calling on both sides to find common ground, Carney did not hold out much hope for compromise with Republicans. The rival budget passed by the GOP-led House cuts social programs too deeply, he said, and fails “to ask for a single dime of deficit reduction from closing tax loopholes for the wealthy and well-connected.”
The Senate vote came after lawmakers labored through the night on scores of symbolic amendments, ranging from voicing support for letting states collect taxes on Internet sales to expressing opposition to requiring photo IDs for voters.
on Internet sales to expressing opposition to requiring photo IDs for voters.
Final approval came at around 5 a.m. EDT, capping an extraordinary 20 hours of votes and debate. As the night wore on, virtually all senators remained in the chamber, a rarity during a normal business day. But at that hour, most had nowhere else to go.
The Senate’s budget would shrink annual federal shortfalls over the next decade to nearly $400 billion, raise unspecified taxes by $975 billion and cull modest savings from domestic programs.
In contrast, a rival budget approved by the GOP-run House balances the budget within 10 years without boosting taxes.
That blueprint— 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 digging deeply into 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 Senate Budget Committee Chairman Patty Murray, D-Wash.
The long debate got testy at times.
As the clock ticked past 1 a.m., Murray asked senators to show respect for colleagues “who may not be able to stand as long as us, or who are elderly.” Sen. David Vitter, R-La., shot back that Republicans were not trying to delay anything, and wondered what flights or other appointments would be missed if senators voted until 7 a.m.
The loudest acclaim came toward the end, when senators rose as one to cheer a handful of Senate pages — high school students — for their work in the chamber since the morning’s opening gavel. Senators then left town for a two-week spring recess.
students — for their work in the chamber since the morning’s opening gavel. Senators then left town for a two-week spring recess.
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 lapse is testament to the political and mathematical contortions needed to write fiscal plans in an era of record-breaking deficits, and to the parties’ profoundly conflicting views.
Republicans said the Democratic budget wasn’t much of an accomplishment. “The only good news is that the fiscal path the Democrats laid out…won’t become law,” said Senate Republican Leader Mitch McConnell of Kentucky.
“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 budget shortfalls have shown signs of easing slightly and temporarily, there is no easy path for the two parties to find 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.
The amendments senators considered during their long day of debate were all nonbinding, but some delivered 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.
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 voiced 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 nonprofits.
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’s $975 billion in new taxes would be matched by 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.
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