Differing Budget Resolutions Pass Each Chamber

March 27, 2013

pic-federal-budgetEarly Saturday morning, the Senate passed its first budget in four years. After more than 13 hours of nonstop votes on nearly 70 amendments, the Senate adopted its fiscal year 2014 budget resolution (S. Con. Res. 8) by the narrowest of margins, 50 to 49. Four Democrats—Max Baucus (Mont.), Mark Begich (Alaska), Kay Hagan (N.C.) and Mark Pryor (Ark.)—voted against it, while no Republicans supported it. This vote was a big victory for Senate Majority Leader Harry Reid (D-Nev.) and Senate Budget Committee Chairwoman Patty Murray (D-Wash.), who had to overcome large differences within their own caucus to pass the resolution.

The Senate plan agrees with the House budget proposal (H. Con. Res. 25) that the government should spend more money in each of the next 10 years than it will spend this year—with the Senate boosting spending at an annual rate of about 5 percent, while the House supports a smaller rate of 3.4 percent a year.

The Senate budget calls for replacing the spending sequester with a combination $1.85 trillion in tax increases and spending cuts, cutting mandatory health care programs without making major structural changes to entitlements and cutting farm programs while increasing spending on infrastructure and worker-training programs by $100 billion over 10 years.

The blueprint also calls for comprehensive tax reform to “eliminate or modify tax breaks that disproportionately benefit the wealthiest Americans, aggressively address the tax gap and offshore tax abuse, and eliminate unfair and inefficient business tax loopholes.” The Senate budget directs the Senate Finance Committee to report tax legislation by Oct. 1, 2013 that would reduce the deficit by $975 billion over a decade.

The Senate “vote-a-rama” featured numerous proposals from both sides intended to reveal the political distance between Republicans and Democrats. Senators rejected 40 to 59, the text of the recently approved House Republican budget authored by Budget Committee Chairman Paul Ryan (R-Wis.). His blueprint, which the House approved by a vote of 221 to 207 on March 21, is vastly different than the Senate resolution, and calls for reducing projected spending by $4.6 trillion by cutting domestic programs, repealing the 2010 health care law, overhauling the income tax code and balancing the budget by 2023.

The Ryan proposal also calls for floor consideration of a revenue-neutral corporate and individual tax reform package modeled on a framework put forward by House Ways and Means Committee Chairman Dave Camp (R-Mich.), that, among other things, would reduce the corporate tax rate to 25 percent, transition the tax code to a more competitive system of international taxation, and substantially lower tax rates for individuals, with a goal of achieving a top individual rate of 25 percent.

Neither budget is expected to win approval in the other chamber, and instead House and Senate leaders would have to agree to negotiate on a broader budget package. The White House is expected to add another challenge to the mix, when President Obama releases his own budget blueprint to Congress, which will likely be the week of April 8.

Additionally, lawmakers averted the possibility of a government shutdown as both chambers approved a continuing resolution to fund government operations for the rest of fiscal year 2013. The bill (H.R. 933) now heads to the White House where it is expected to be signed into law before the current temporary funding measure expires on March 27.

Please click here for more on NSBA’s calls for broad tax reform.