Congress Has Yet to Pass Budget, Tax Cuts

The budget and tax reconciliation measures laid out in Congress's April 2005 budget resolution took up a good deal of lawmakers' time and energy throughout last fall, and continue to linger unfinished, even as the release of the president's Fiscal Year 2007 budget rapidly approaches. The House of Representatives, in fact, is scheduled to vote on the final budget bill one week before the president is scheduled to release his budget on Feb. 6. The vote will pave the way for votes on the two remaining reconciliation measures: one to cut taxes by as much as $70 billion and one to increase the national debt limit by $781 billion. Of the three reconciliation measures, the budget bill has been the most contentious, due to cuts it makes to programs serving low- and moderate-income households, cuts that ultimately do not address the burgeoning deficit. In fact, the net effect of the three bills will be an increase of the deficit by billions of dollars. The cuts are particularly harmful to Medicaid, child support enforcement, foster care, and student loans programs. Despite these damaging cuts, the budget bill was passed by the Senate on Dec. 21. Senate lawmakers, however, passed a slightly different version of the bill (with three minor modification) than that passed by the House two days earlier. House members, therefore, must vote on the bill a final time before sending it to the president. The first House vote on the budget reconciliation bill was a close one (212-206), and the upcoming vote is expected to be close as well. Nine Republicans voted with Democratic members against the bill. Six Democratic members and ten Republican members did not vote, possibly because the voting took place so closely to the holiday recess. Moderate House Republicans, a number of whom initially express opposition to the bill but ultimately voted for it, now have the chance to vote their consciences, rather than line up behind their leadership. The Emergency Campaign for America's Priorities is organizing a number of events, including local vigils and phone call blitzes to lawmakers, in an effort to tip the vote against the troubling program cuts. If the budget cuts bill passes, it will open up an additional $10 billion worth of tax cuts that can be included in the tax reconciliation bill, which still remains unfinished. The House passed a $56 billion bill in early December, on the heels of a $60 billion bill passed by the Senate on Nov. 17. Along with the reconciliation bill, the House passed three tax-cut bills in December. The four bills cost a combined $94.5 billion over five years, twice the total of all cuts to low-income programs being made in the name of fiscal responsibility. The House and Senate still must iron out differences in the tax reconciliation bill in conference--no easy task as the bills are significantly different--and then vote on a final package. Finally, the House and Senate can be expected to easily pass an increase on the debt limit, which is expected to reach $8.2 trillion in mid-February. As a politically sensitive one, the vote will likely take place late at night, possibility around a holiday, when fewer people are watching. While raising the debt limit will impact few people directly, it is yet another indication of the unsuccessful long-term fiscal policy of the Bush administration and Congress. Bush, who spent $225 billion in federal revenue on tax cuts in 2005 alone, has raised the debt limit three times during his presidency, in June 2002, May 2003, and November 2004. Secretary of the Treasury John Snow recommended to Congress in late December that the debt limit be raised again "as soon as possible."
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