|
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 March 30 , 2007 edition
of the CHN Human Needs
Report:
On March 23, after four intense days of debate, the Senate approved its budget resolution, S. Con. Res. 21, by a vote of 52-47. Supporters included all of the Democrats, Independent Senators Lieberman (CT) and Sanders (VT), and two Republican Senators Snowe (ME) and Collins (ME). The budget resolution passed by the Senate maintained the basic parameters set in place by the Budget Committee a week earlier (see 3-16-07 HNR story: http://www.chn.org/humanneeds/070316a.html). However, several troublesome amendments did pass and others portend potential struggles particularly on the tax front.
During the Bush Administration there has not been a “pay-as-you-go” rule in place which made it easier for the Republican leadership to pass $1 trillion in tax cuts that were not offset with tax increases or spending cuts. Because of other procedures used to pass the huge tax cuts in 2001 and 2003 that provide enormous benefits to the very wealthy, the tax cuts are set to expire in 2010. During the debate, Republicans argued that because the budget does not call for extending those tax cuts it raises taxes. Most Democrats countered that the Republicans crafted the original provisions setting the 2010 expiration date. Further, while the budget resolution is required to make projections for 5 years, it is essentially a one-year budget and there is still time to address the expiring tax cuts.
The committee budget projected a $132 billion surplus by 2012. In an attempt to prevent Republican amendments from using that yet-to-be-realized surplus to extend certain taxes like the estate tax, Democratic leaders agreed that the first amendment would assign the surplus mostly to “so-called” middle-class tax cuts – the child tax credit, elimination of the marriage penalty, and the new 10 percent tax bracket. The amendment offered by Senator Baucus (D-MT) also calls for using $15 billion of the surplus to pay towards the $50 billion extension of the State Children’s Health Insurance Program agreed to elsewhere in the budget, and for a continuation of the estate tax at the level in place in 2009. In 2009, estates of $3.5 billion for individuals and $7 million for couples are totally exempt from paying estate taxes. The Baucus amendment more than wipes out the hoped-for $132 billion surplus, piling up costs of $195 billion, almost all in tax breaks. While the amendment symbolically weakens the pay-as-you-go rule because the cost is not fully offset, ultimately the committees wishing to enact SCHIP legislation or extend the tax cuts would need to pay for them unless the rule is waived. Advocates hope the House and Senate Budget Conference Committee which will resolve the differences in the House and Senate bills will drop the Baucus amendment.
Another problematic amendment on the tax front that passed (63-35) with significant Democratic support was offered by Senator Cornyn (R-TX). The amendment would require 60 votes in the Senate to pass any legislation to raise tax rates. This would affect any budget-neutral efforts to permanently fix the Alternative Minimum Tax (AMT) so that high-income taxpayers for whom the tax was initially intended pay the AMT while exempting the middle-income who are increasingly subject to the tax. The amendment, which 14 Democrats favored, is an indication of how squeamish they are about not wanting to be accused of raising taxes. Indications are that this amendment is likely to be dropped in conference. A series of other tax-related amendments that would seriously gut the estate tax and change procedures making it easier to cut taxes failed.
The State Children’s Health Insurance Program (SCHIP) was the focus of another series of amendments. In addition to the Baucus amendment which pays for $15 billion of the $50 billion expansion in the program with anticipated surpluses, an amendment by Senator Smith (R-OR) passed (59-40) calling for raising the tobacco tax to help pay for SCHIP. Amendments that would have restricted SCHIP and Medicaid failed. Some would have: limited states’ flexibility to cover parents or children above 200 percent of poverty; restricted use of certain Medicare funds as offsets for improvements in SCHIP and Medicaid; and undermined Medicaid’s guarantee of Early and Periodic Screening, Diagnosis and Treatment for children.
A number of positive amendments were offered to increase funding for programs. An amendment by Senator Sanders (I-VT) which would have increased funding for the Individuals with Disabilities Education Act failed (38-58). An amendment by Senator Biden to add $100 million to the funding allocation for the Violence Against Women Act passed by unanimous consent, requiring no recorded vote. In total, scores of amendments were offered. Provisions that passed and remain in the final bill will still need to be acted on by the authorization and appropriations committees with jurisdiction over the programs later in the year, and entitlements and tax cuts will be subject to the pay-as-you-go rule.
It is important that Congress pass a joint House and Senate budget resolution. Without one, overall domestic discretionary spending will remain stuck at the previous unacceptably low level, and tax cuts can be approved with little attention to how much revenue shrinks and the deficit deepens. While the budget resolution is not signed into law by the President and is therefore non-binding it is the blueprint Congress will follow to make funding and tax decisions for FY 2008. The House and Senate plan to complete work on the joint budget resolution after returning from spring recess so that by early May the over $930 billion discretionary pot of money can be divided among Appropriations Subcommittees and their work of allocating money to individual programs can begin.
|
