The Senate Budget Committee began marking up a fiscal year 2005 budget resolution yesterday that will severely restrict spending for many programs that serve low-income families. The budget proposed by Committee Chairman Don Nickles (R-OK) would cap discretionary spending (spending that is appropriated annually) at $814 billion – $9 billion below the level proposed by the President. The Senate budget resolution would provide virtually no increase in non-defense, non homeland security programs that are appropriated on an annual basis – and even trims $2 billion from the President’s level. Many federal programs serving low-income families – such as job training, certain nutrition programs, child care, housing, and child welfare programs and Head Start – fall unde this category of spending. At the same time, the budget makes room for $144 billion in more tax cuts over the next five years.
The Senate budget resolution also contains reconciliation instructions to the Finance Committee directing it to cut $3 billion from mandatory spending (spending that is authorized for multiple years and do not need annual appropriations). Programs that serve low-income families – Medicaid and the Earned Income Tax Credit – are the most likely targets for these these cuts. (The reconciliation instructions provide procedural protection from later changes on the Senate floor because overriding these instructions would require 60 votes.)

The full Senate will take up the budget resolution next week and the House Budget Committee is scheduled to mark up its budget resolution on March 10.

Both the Senate and House Budget Committees will be consider proposals to make changes in the rules that govern what is included in a budget and how the budget is approved by Congress. The President’s budget proposes that Congress change the rules so that any new spending would have to be paid for by cutting other programs. However, new tax cuts would not have to be offset – either by tax increases or spending cuts. The proposed rules increase incentives for Congress to pass more tax cuts and reduces the incentives to increase spending. Sen. Pete Domenici (R-NM) may offer a version of a convoluted “pay-as-you-go” rule as an amendment in the Budget Committee.

For more information about these budget process rules, see:

February 13 Human Needs Report story President Releases Fiscal Year 2005 Budget
Center on Budget and Policy Priorities Applying Pay-as-You-Go Rules.

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