It is budget resolution time in the House and Senate. Last week the budget committees issued their respective “Chairman’s Marks” and this week those Marks will go to the floor for debate. This debate will most likely be followed by passage of the budget resolution. House Budget Markup The House Budget Committee passed the Chairman’s Mark March 9th on party lines, by a vote of 22-15. The House budget proposal cuts programs $216 billion over five years. There are significant reductions in funding for programs dealing with veteran’s benefits, environmental protection, and education. 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 roughly $106 billion worth of tax cuts are included in the mark. Of that amount, $45 billion were set aside to be protected under reconciliation instructions, which is basically a fast-tracked budget process that allows for changes to be made to mandatory funding levels or tax policies without the opportunity for filibusters. The House Budget Committee’s Mark also proposes cuts to Medicaid which are deeper than those proposed by the President. 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. Since Medicaid is one of their largest programs, it is likely to be hit hard. 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.” Despite record-level deficits in FY 2004 that the President now promises to halve through cuts to mandatory and discretionary spending, the Chairman’s Mark – much like the President’s budget proposal -- suggests passing new tax cuts. The tax cut provisions include extensions 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 would be overwhelmingly reaped by those with the highest incomes. This new CBPP report suggests the costs of these tax cuts will, in the long run, mitigate any short term positive effects they could have on the economy. It is expected that the House will 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. The House Chairman’s Mark will go to the floor Tuesday, March 15th. Senate Budget Markup 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, as this report from 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; and indeed, the spending guidelines laid out in the Senate proposal claim to produce a $208 billion deficit in 2010. To work towards this deficit, the Senate proposal – unlike the House 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, these spending requests amount to a 2.1 percent increase in spending, despite the cuts in mandatory programs, which the Senate Mark proposes to be $38 billion over five years. The proposal specifically instructs the Senate Finance Committee to make cuts of $15 billion over a five year period to any of their programs; if this were adopted, cuts to Medicaid would be likely. However, Senators Smith (R-OR) and Bingaman (D-NM) are offering a Medicaid amendment which would strike these reconciliation instructions to the Finance Committee, and according to CongressDaily, their amendment appears to have broad bipartisan support. Like the House budget blueprint, the Senate version will be on the floor this week for 50 hours of debate, likely followed by final passage. Senate debate begins on Monday the 14th, 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), has offered an amendment to create Pay-go rules requiring offsets for new tax cuts or entitlement spending, and at the time this article was published, he only needs one more vote for his amendment to pass. Under the Senate Chairman’s Mark, roughly $70 billion in tax cuts for the next five years would not require offsets, so Feingold's amendment is of extreme importance.