Blog: The Fine Print / Revenue & Spending

Senate Budget Committee Markup

Mar 11, 2005 by Guest Blogger

The Senate Chairman’s Mark, which was passed by the Senate Budget Committee 12-10 (a party line vote), proposes spending $2.56 trillion in FY 2006 and $13.8 billion total over the next five years. Despite these levels, the Chairman’s Mark would cut spending for domestic discretionary programs by approximately $207 billion over five years, adjusted for inflation. In 2010 alone, the Center on Budget and Policy Priorities estimates, funding for domestic discretionary programs would be cut by 13 percent. Like the House Committee’s Mark, the Senate version claims that lowering this spending over five years will succeed in halving the deficit. The spending guidelines laid out in the Senate proposal claim to produce a $208 billion deficit in 2010. Unlike the House markup, the Senate proposal includes caps for discretionary spending for 2006, 2007, and 2008. These caps would lock in cuts for spending through 2008, and would prove to be extremely harmful for programs already on the chopping block. The Senate Mark falls in line with the President’s request and proposes allocating $439 billion for defense and $404.5 billion for non-defense programs. Overall, this amounts to a 2.1 percent increase in spending. The Mark also proposes cuts in mandatory spending of $38 billion over five years. The Senate Finance Committee must make cuts of $15 billion over a five year period, so large cuts to Medicaid are likely. Like the House budget blueprint, the Senate version will go to the floor sometime next week for 50 hours of debate, likely followed by final passage. Senate debate begins on Monday, at which point there will be a series of tough amendments offered by Senators on topics such as farm payments, budget enforcement rules and oil drilling in the Arctic National Wildlife Refuge. Senator Feingold (D-WI), will most likely offer an amendment to create Pay-go rules requiring offsets for new tax cuts or entitlement spending. Under the Senate Chairman’s Mark, roughly $70 billion in tax cuts for the next five years would not require offsets.

read in full

House Budget Committee Passes Chairman’s Mark

Mar 10, 2005 by Guest Blogger

The House Budget Committee passed the Chairman’s Mark last night on party lines, by a vote of 22-15. While the Chairman’s Mark calls for decreased spending on domestic programs, it actually increases rather than decreases the deficit over time, despite continued statements by Congressional GOP leaders that the deficit will be cut in half by 2009. The Center on Budget and Policy Priorities estimates the House Committee’s proposal would increase the deficit by $126.9 billion. This is largely due to the fact that tax cuts are included in the mark. The House budget proposal cuts programs $216 billion over five years; there are significant reductions in veteran’s benefits, environmental protection, and spending on education. At the same time it proposes increasing spending for defense and international discretionary programs by $202 billion. The House Budget Committee’s proposal also proposes deeper cuts to Medicaid than the President proposed in his budget. Although the Chairman’s Mark does not specify which mandatory programs should be cut, the Mark does instruct the Energy and Commerce Committee to make reductions of $20 billion over five years to programs under their jurisdiction, one of which is Medicaid. As this Center on Budget and Policy Priorities report states, “These Medicaid cuts are likely to push hard-pressed states to eliminate coverage for a substantial number of low-income people, increasing the ranks of the uninsured and the underinsured.” Even though national revenues are lower than they have been since the 1950’s, and are helping to build our record-level deficit, the Chairman’s Mark -- like the President’s budget proposal -- suggests passing new tax cuts. The proposal specifically calls for the passage of $106 billion worth of tax cuts over the next five years, and includes an extension of dividend and capital gains tax cuts, which were enacted in 2003 but are slated to expire in 2008. The benefits of these two tax cuts flow overwhelmingly to those with the highest incomes. $45 billion of those tax cuts were set aside to be protected under reconciliation instructions, which is smaller than the $70 billion the Senate endorsed to be protected under reconciliation. The House will more than likely move more than one tax bill this year however; one in the reconciliation process and likely another one outside reconciliation to make the 2001 and 2003 tax cuts permanent.

read in full

Republican Opposition to Budget Proposals

Mar 10, 2005 by Guest Blogger

Opposition to the outcome of yesterdays House Budget Committee markup started small and is growing significantly among House Republicans. The opposition began with a small group of Republican Study Committee leaders, including Rep. Mike Pence (R-IN), Jeff Flake (R-AZ), and Jeb Hensarling (R-TX). The Republican Study Committee is a House caucus of over ninety conservatives. Their opposition, which according to this article in The Hill has spread to over forty Republican representatives, is based in the fact that the leadership’s plan is “unenforceable because it does nothing to curtail House leaders' power to waive budget rules for legislation that violates the budget.” The Republican leadership – and especially Budget Committee Chairman Nussle (R-IA) – are worried these “rebels” will vote with the Democrats against the budget when it is brought to the floor next Wednesday. The RSC leaders have the support of many members of the “Tuesday Group,” which is a caucus of about thirty centrist House members. The Tuesday Group is chaired by Reps. Mark Kirk (Ill.) and Charles Bass (N.H.). Their coalition with the RSC is significant because together the membership of the two groups total nearly 120 GOP lawmakers. Their opposition to the budget blueprint put forth by Nussle has significantly spread beyond a few conservative leaders and members of the Budget Committee in the past two days, and is showing that the leadership’s insistence on unwavering support for the Chairman’s Mark have had little effect. Senate Republicans have also apparently been expressing concern about the budget proposals ahead of them. Today’s New York Times, reports, “the budget was not enough to mollify some Senate Republican moderates, who expressed concern Wednesday about extending the tax cuts at a time when the deficit is at a record high and domestic programs from farm subsidies to veterans' benefits and education are facing steep cuts.” Last year recall that a few key Senators – Voinovich (R-OH), Collins, (R-ME), Chafee (R-RI), and McCain (R-AZ) – were extremely outspoken in their opposition to budget policies which they did not feel were fiscally responsible. With this year’s budget, Chafee has said, “I've been consistently opposed to tax cuts when at the same time we're not controlling our spending, and I don't think this year will be any different.” Another Senator wary of fiscal irresponsibility, Snowe (R-ME), has said, “Suffice it to say, I do have serious concerns with the fundamental priorities that are being constructed in the budget. It's exacting a high price from some of the programs that are critically important to the future." Senator Coleman (R-MN) is yet another Senator opposed to the budget proposal; however he is opposed more to specific cuts laid out in the budget instead of the costly tax cut proposals. Coleman has gathered signatures of 57 senators to fight for urban renewal grants, which Bush has proposed to cut. The battle over the budget in the Senate will prove to be very interesting. Republicans have 55 votes in the Senate, which is four more than they would need to pass the budget if everyone voted on party lines. Past budget battles have resulted in Congress being unable to adopt a budget blueprint in two of the last three years; another failure to do this would reflect badly on both the President -- who has been lately stressing the importance of fiscal responsibility -- and Congressional GOP leaders as well.

read in full

More Details on House Budget Markup

Mar 9, 2005 by Guest Blogger

House Republicans working on the budget have proposed cutting almost $18 billion more in mandatory spending cuts than President Bush requested. The cuts are especially deep in medicaid. They also outlined their plans to provide more for military costs in Iraq and Afghanistan and for fixing the alternative minimum tax, all while setting aside billions of dollars to go towards Bush's tax cuts. Notably, the budget "mark" does not include any caps for discretionary or entitlement program spending. It proposes an overall 2.1 percent discretionary spending increase, however a good chunk of that increase is in areas of defense and homeland security. The House budget blueprint will most likely go to the floor next Wednesday. For more details check out the House Budget Committee web site here.

read in full

Tax Cuts in the Budget Committee Markups

Mar 9, 2005 by Guest Blogger

Today marks the beginning of budget committee markups. Click here for the House Budget Committee Overview of the FY 2006 Budget Resolution. The Senate mark should be available later today. It appears today that House Republicans are planning to include approximately $48 billion in tax cuts in their budget resolution, while the Senate is supposedly planning to include around $70 billion. While these numbers are significantly lower than Bush's request, they are still extremely costly endeavors in a time when we are facing high cyclical deficits and proposing to cut spending for social programs significantly. A good editorial in today's Washington Post compares the Congressional Budget Committees' action of lowering the amount spent on tax cuts to "the restraint of a dieter who is accustomed to scarfing down three pies a day and wants applause for cutting back to one." This analogy is right on track. Any tax cuts pursued in this budget reconciliation process in conjunction with spending reductions in mandatory programs are costly and contradictory actions that use the guise of deficit reduction to further shrink the role of government and actually result in larger budget deficits. Click here and here for more information on the tax cuts. Click here for an informative Center on Budget and Policy Priorities report on CBO's recent preliminary analysis of the President's budget policy priorities.

read in full

Tax Cuts in Reconciliation; Medicare Estimates Up

Mar 8, 2005 by Guest Blogger

Three items of importance: Last friday the Congressional Budget Office released an updated analysis of the President’s budget for fiscal year 2006, which includes an update of their baseline projections for the 2006-2015 period. In preparing this updated projection, they revised their estimates for Medicare spending. See this document, "Updated Estimates of Spending for Medicare," for details. The CBO's new spending estimate is an increase of almost 50 percent since their last estimate. Also of importance is today's news that the Senate will set a budget reconciliation tax figure of roughly $71 billion, which is down from the approximately $100 billion Bush proposed spending on tax cuts in his FY 06 budget proposal. See this OMB Watcher article for more information. Senate Republican budget writers are now saying this amount should be sufficient to cover the cost of extending expiring tax provisions through the five-year budget window; however this cost does not address the potential high costs of alternative minimum tax reform. These tax cuts, because they will be completed in reconciliation, will be given as instructions to the Finance Committee to undertake. Reconciliation bills are considered under expedited procedures in the Senate and cannot be filibustered. Finally, yesterday Senator Hegel (R-NE) introduced a Social Security bill that is based on the creation of private investment accounts. Like the White House, Hegel supports diverting four percentage points of payroll taxes to fund these accounts. Hegel's plan would allow workers under the age of 45 to divert part of their payroll tax contributions for these accounts. Read a transcript of Hegel's speech on his Social Security proposal here. Senate Minority Whip Durbin (D-IL) reiterated the Democratic leadership's stance on Social Security reform by calling any plan with privatization accounts "non-starters" on Meet the Press the other day. Click here for more information.

read in full

Watcher: March 8th, 2005

Mar 8, 2005 by Guest Blogger

Federal Budget
  • Bush Budget to Increase Deficits $1.6 Trillion Over 10 Years
  • Social Security Debate Take Dramatic Shift
  • Congressional Leaders Begin Negotiations on Budget Resolution
  • Federal Spending Cuts, Caps to Hurt States Facing Own Deficits
  • Congress Rejects Competing Minimum Wage Amendments

read in full

Senate Votes Against Both Minimum Wage Proposals

Mar 8, 2005 by Guest Blogger

In yesterday evening's vote on the minimum wage, neither the Kennedy (D-MA) measure nor the Santorum (R-PA) counter-measure gained enough support to pass the Senate. The Kennedy measure, which would have increased the minimum wage by $2.10 over 26 months, was defeated 46 - 49. Perhaps more importantly, the Santorum measure -- which proposed to raise wages $1.10 but also included harmful changes to labor laws -- was defeated 38 - 61. See this Washington Post article and this OMB Watcher article for more information.

read in full

Tax Cuts Will Not Slash Deficits

Mar 7, 2005 by Guest Blogger

Last friday the CBO released their report saying the President's proposal to cut entitlement spending will actually save $11 billion less than the White House had initially projected. On top of this, according to today's CQ update, congressional budget writers are planning to include the estimated costs of Iraq and Afghanistan operations as well as a one year extension of Alternative Minimum Tax relief in the budget. This is significant because the White House ignored each of these items in their budget propsal. Keeping these expenses -- as well as a deficit reduction goal -- in mind means the five-year tax cut figure in the budget resolution will likely have to decrease from what was originally envisioned by Bush and Congressional GOP leaders. Budget writers are realizing that these expenses, along with expensive tax cuts, will not achieve deficit reduction. Congressional aides are saying the tax cut amount may decrease from $100 billion to about $70 billion. There will be further updates later this week as the House and Senate budget committees mark-up the budget resolutions on wednesday and thursday.

read in full

CBO Releases Cost Estimates for Bush FY06 Budget

Mar 4, 2005 by Guest Blogger

It's been a busy news day for tax and budget news and the last item is the biggest. The Congressional Budget Office has released its estimates for the cost of President Bush's FY06 Budget. The CBO regularly estimates the cost of legislation and policies for the Congress and this report will greatly impact the way the Congressional Budget committees in the House and Senate write their FY06 budget resolutions, slated to be marked up by the committees next week. In their report, CBO estimates that President Bush's budget would keep deficits about $200 billion each year for the next decade and add over $1.6 trillion to the national debt that would otherwise occur if the policies were not enacted in that time period. CBO predicts a FY05 deficit of $394 billion and FY06 deficit of $332 billion. CBO also lowers the savings that would result from some of the president's cuts to mandatory spending. Overall, CBO estimates changes to mandatory spending would save $26 billion in FY06, not the $38.7 billion cited by the president. They also lower the estimate for savings in Medicaid and the S-CHIP program from $45 billion to $27 billion - almost half that amount. The most promienent conclusion in the report is surely that Bush will come up short of his promise to cut the deficit in half by 2009. It projects a deficit in 2009 of $246 billion, fully $40 billion short of Bush's goal. Further, neither Bush's budget nor the CBO report include many expensive future policies likely to be enacted, such as costs for overhauling Social Security ($1 to $2 trillion over 10 years), fixing the Alternative Minimum Tax ($754 billion over 10 years), or supplemental military costs for the wars in Iraq and Afhganistan (currently $82 billion for 2005). Despite this grim forecast, the administration and Republican leaders in Congress are steadfast in their support of making CBOs projections a reality by extending tax cuts to the wealthy without offsets to pay for them.

read in full

Pages

Subscribe to The Fine Print: blog posts from Center for Effective Government
  • ©2025 Project On Government Oversight
  • All Rights Reserved.
  • This an archive site of the materials produced by the Center for Effective Government (formerly OMB Watch) and is maintained by the Project On Government Oversight.