The Senate passed its version of a FY 2007 budget resolution on Thursday night, 51-49 . The budget debate exposed widening divisions among the Republican majority, with some members insisting on increases in spending beyond the President’s proposal, and others seeking further cuts. Those who rejected the service cuts in the President’s budget held sway, and some important restorations were made.
Victories in adding funds for human needs programs. Two amendments were especially important. The Specter (R-PA)-Harkin (D-IA) amendment added $7 billion to the total funding for annually appropriated (“discretionary”) programs in FY 2007, with the assurance that those funds would be made available for education, health, and labor programs. Specter-Harkin passed 73-27 , showing widespread bipartisan rejection of the President’s cuts in these areas. The Reed (D-RI) amendment added $3.318 billion to the appropriations total for FY 2007, to be used to increase funding for the Low Income Home Energy Assistance Program (LIHEAP); it passed more narrowly, 51-49 .

Senators not only were willing to increase funding for important priorities; they soundly rejected attempts to make further cuts. An amendment proposed by Senator Inhofe (R-OK) would have frozen annually appropriated domestic programs at the FY 2006 level, starting in FY 2007 and continuing indefinitely, unless overturned by a two-thirds vote. This draconian proposal was rejected 35-62 .

Another unsuccessful amendment was an attempt to force the adoption of cuts in Medicare and other mandatory programs. Senators Cornyn (R-TX) and Graham (R-SC) co-sponsored an amendment to require the Senate Finance Committee to come up with $10 billion in cuts from FY 2008 through FY 2011. The expectation of the amendment was that at least half of these cuts would come from Medicare, although the Finance Committee could make the cuts from any program in its jurisdiction (including Medicaid, child welfare, child support, and Temporary Assistance for Needy Families). The amendment failed resoundingly, 43-57

The Cornyn-Graham amendment would have imposed a “reconciliation directive” on the Senate Finance Committee – forcing the Committee to produce legislation that would achieve $10 billion in cuts. The reconciliation legislation, like legislation adopted last year making substantial cuts in Medicaid and other programs, would be subject to limited debate in the Senate, and could therefore pass with a simple majority vote. The Senate rejected a replay of the painful debate around a reconciliation bill, except that it retained stand-alone reconciliation instructions intended to force the later approval of drilling in the Arctic National Wildlife Refuge (ANWR), estimated to produce $3 billion in revenues.

A failed attempt to drop a provision limiting spending for mandatory programs. Senator Bingaman (D-NM) attempted to delete a provision in the Senate Budget Committee’s resolution that would require cuts in all mandatory programs (aka entitlements, such as Medicaid, Food Stamps, student loans, etc.) if more than 45 percent of Medicare’s costs were projected to be paid for out of general revenues. His amendment failed on a 50-50 tie, after Senator Coleman (R-MN) changed his vote from yes to no. Advocates objected to forcing cuts on a range of vital programs simply because more of Medicare’s costs were being paid for out of general revenues. Other sources of Medicare funding – the payroll tax and premiums or other fees for medical care – are borne far more by low- and middle-income people; general revenues are collected more according to ability to pay. This automatic trigger of spending cuts is a very one-sided approach to rising Medicare costs, leaving out solutions that might involve tax revenues.

A close vote on more evenhanded budgetary controls. Senator Conrad (D-ND) narrowly missed with an amendment to restore the Senate’s now defunct controls on new spending or new tax cuts – known as “Pay as You Go” or “Pay-Go.” These rules would require loss of revenue from tax cuts as well as the costs of increased spending to be paid for by other revenue increases or cuts in spending. Now, Congress requires new spending to be paid for by cuts in programs, but new tax cuts can be passed even though they will increase the deficit. Right wing members of Congress have been extremely insistent on continuing to pay for tax cuts with borrowed money. The Conrad amendment also failed on a 50-50 tie.

Medicare. Senator Snowe (R-ME) introduced a successful amendment to ensure that any savings that would occur if legislation is adopted to require the federal government to negotiate Medicare prescription drug prices goes either to deficit reduction or to improving the Medicare prescription drug program. The impact of this amendment is of course contingent on the passage of such legislation. The Snowe amendment passed 54-44 . Another provisional amendment successfully added was authored by Senator Grassley (R-IA), which provides a reserve fund to allow for deficit-neutral legislation to extend the enrollment period for the new Medicare prescription drug plan, should such legislation actually be adopted. That amended passed 76-22 .

Real Versus Suggested Restorations. The budget debate included a number of other amendments that purported to restore spending for certain purposes, but that did not increase total funding for annually appropriated programs. Without increasing the total, such amendments are just suggestions to the appropriators that, if followed, would require other programs to be cut still more deeply. The Specter-Harkin and Reed amendments, adding funds for education, labor, health, and energy assistance, added to the total funding available for FY 2007, and therefore are meaningful changes in the budget resolution. However, Specter-Harkin finds its funding by advancing appropriations from FY 2008, which deepens the funding hole for that year. Senator Specter acknowledged that this is a funding “gimmick” – but it is one that would prevent some cuts for the coming year and give advocates time to address the FY 2008 problems later.

Senator Specter defended his fight for more funding by recognizing that “health and education are the two major capital assets of this country.” The Senate budget still does not provide enough support for these essential assets. As Specter and Harkin acknowledged at a meeting with advocates before debate began on their amendment, the restoration of $7 billion would only bring the funding for education, health, labor, and social services back to their FY 2005 levels – not even adjusting for inflation. But some of the votes on the Senate floor were acknowledgements that Senators are getting the message from constituents that investments in such services are important, and that cuts are unpopular.

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