March 24, 2013

Spending plan squeaks through Senate

The $3.7 trillion budget, approved after 20 hours of votes and debate, calls for $1 trillion in tax hikes.

By ALAN FRAM/The Associated Press

(Continued from page 1)

Patty Murray
click image to enlarge

Senate Budget Chair Patty Murray, D-Wash., says the Senate and House budgets represent “different visions for how our country should work and who it should work for.” The House plan imposes no tax hikes and balances the budget within 10 years by cutting safety net programs.

2013 File Photo/The Associated Press

"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 Obama is demanding a combination of tax increases and spending cuts to do so, while Republican 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 that 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.

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 Republican 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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