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The Human Needs Report is the Coalition on Human Needs' newsletter on national policy issues affecting low-income and vulnerable populations. It is published every other week while Congress is in session.
Article from the April 27, 2001 edition of the CHN Human Needs Report: Bush Signals Willingness to Accept Smaller Tax Cut
With Congress just returning from a two-week Easter recess, there has only been minimal progress by House and Senate negotiators who are working out differences between their respective FY 2002 budget resolutions. The House passed its version (H. Con. Res. 83) on March 28 by a vote of 222-205. The Senate passed its version on April 6 by a vote of 65-35.
The House resolution closely tracks President Bush's priorities, limiting overall FY 2002 discretionary spending to $660.7 billion, an increase of just four percent, while providing for a $1.62 trillion tax cut over ten years. The House has already passed three tax bills (H.R. 3, H.R. 6, H.R. 8), consuming most of this allotment. The Senate budget resolution, however, trimmed the Bush tax cut back to $1.18 trillion over ten years, while increasing FY 2002 discretionary spending to $688.4 billion.
On April 25, the president conceded that compromise may be necessary on the size of his tax cut, but the administration is continuing to push for as much as is politically feasible. Key to the ongoing negotiations is the support of a group of moderate Democrats led by Sen. John Breaux (D-LA), who is insisting that he will not support a tax cut larger than $1.25 trillion over ten years. The administration is currently pushing for a total closer to $1.4 trillion, including a $60 billion stimulus package that would become effective in the current fiscal year (FY 2001). While the final number for the budget resolution may end up somewhere in between, the administration and congressional Republicans may seek to increase the total through other tax legislation enacted outside the context of the budget resolution. One possible vehicle is legislation increasing the minimum wage, which could include a package of tax cuts for businesses.
Negotiators may work out differences on the discretionary spending total by accepting the House's $661 billion total, but also providing for generous FY 2001 and FY 2002 supplemental appropriations bills that would cover additional spending for agriculture, defense and disaster relief. The administration reportedly favors this approach because it would keep the budgetary baseline lower, thus allowing lower spending levels in future years without such levels being labeled a spending cut.
Negotiators are reportedly also working on language laying the groundwork for a ten year, $300 billion Medicare prescription drug benefit if it is accompanied by a significant restructuring of the Medicare program. The president's budget set aside $153 billion for a prescription drug benefit, an amount widely believed to be too low. The higher number being considered by budget negotiators may be more realistic, but it may be hampered if it is tied to broader Medicare reform, an issue on which there is little congressional agreement. Even if it is freed of such considerations, however, Senate Majority Leader Trent Lott (R-MS) has indicated that there may not be enough time to consider such legislation in the Senate this year.
At press time, it is unclear when congressional negotiators will have a deal ready for final consideration on the House and Senate floors. House leaders are reportedly hopeful that one will be in hand some time in the coming week. Passage of the budget resolution is critical at least in the Senate, where it will provide protection from filibusters to any tax legislation considered there. Congressional leaders have said that they would like to send President Bush a major tax bill to sign by Memorial Day.
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