House, Senate pass their 2010 budgets, with cuts and amendments

Thursday night, after debate, cuts, amendments, and wrangling, the Senate adopted its $3.53 trillion 2010 fiscal budget. The final tally was 55-43, with all Republicans and two Democrats opposing.

Although Senate Republicans publicly opposed the budget, their strategy to break it was through amendments rather than propose a budget of their own. The lone dissent---dare we say maverick?--to this was Senator John McCain (R-Arizona), who presented his own version, which granted boons to the Pentagon, with budget increases; to the wealthy, with tax cuts (late Valentine's Day present to his wife?); and stole from the needy, with cuts to Medicare, Medicaid and Social Security. McCain's proposal failed 60-38, with total Democrat consensus and with Republican help from the now famous Senators Olympia J. Snowe and Susan Collins of Maine, plus Senator Bob Corker of Tennessee.

The House passed its budget earlier Thursday, in a 233 to 196 vote (once again, all Republicans opposing, plus 20 Democrats).

Although the passed Senate budget pared back Obama's proposed budget (Senate version is $3.53 trillion compared to Obama's $3.6 trillion), cut elements such as "Making Work Pay" and slows deficit reduction, Democrats assure us the integrity of President Obama's budget was left intact, and that health care reform is still likely.

From Kent Conrad (D-North Dakota), Chairman, Senate Budget Committee:

CHAIRMAN’S MARK FOR FY 2010 SENATE BUDGET RESOLUTION
The Chairman’s Mark for the Fiscal Year 2010 Senate Budget Resolution is a fiscally responsible budget plan that addresses the fiscal and economic crises inherited by the Obama Administration and lays the foundation for long-term economic security. It preserves the major priorities in President Obama’s budget: reducing our dependence on foreign energy; striving for excellence in education; and reforming our health care system. It provides significant middle-class tax relief, directed at families with incomes under $250,000. And it cuts the deficit in half by 2012 and by two-thirds by 2014.

The Senate then went on to vote on approximately 24 amendments, including (but not limited to):

• From Congressional Quarterly: "Republicans were able to score one victory on the estate tax with the help of 10 Democrats. Under current law the estate tax — now with a top rate of 45 percent with an exemption of $3.5 million per person — will disappear Jan. 1, 2010, and will return with higher rates and lower exemptions in 2011."
• A new boost to transparency in government succeeded when the Senate passed an amendment requiring the Federal reserve to identify every bank and financial institution that received aid. (From Bernard Sanders, Independent-Vermont) Senator Christopher Dodd's (D-Connecticut) similar amendment (audits of emergency actions to stabilize economy and public disclosure of lending facilities) also passed.
• Senator Lindsey Graham's (R-South Carolina) amendment making energy and "marriage penalty" tax increases harder to achieve, passed.

Jack Reed (D-Rhode Island) proposed an amendment, that passed, to ensure that last year’s TARP (that first $700 billion) will be used as intended to help prevent foreclosures, assist small businesses, stabilize the municipal bond market, and get lines of credit going.

While this is a step forward, there are a few things to consider:

1. The plan that passed---and to be fair, none of the plans, House, Senate, GOP, or Obama's did any better than each other on this measure---does cut the deficit nearly in half by 2012, as Conrad said, but that still leaves it over $500 billion. What is there to ponder about that? Consider that level of debt against a falling GDP (in 2008, the GDP decreased at an annual rate of 6.3 percent in the fourth quarter of 2008) and you end up maintaining an upside down economy. You can see the actual red numbers here.

In short:

• the estimated 2008 US GDP (purchasing power parity) is $14.29 trillion
• the estimated 2008 US GDP (official exchange rate) is $14.33 trillion 
• the proposed budget from Senate is $3.53 trillion
• the current US deficit is $1.7 trillion
• the current US debt is $11 trillion (and growing) (Important quote from that article, "By the time George W. Bush was inaugurated in 2001, the National Debt stood at $5.7-trillion. He ran up more debt faster than nearly all of his predecessors combined: just under $4.9-trillion.")

2. The budgets that passed are simply that: budget resolutions. In order for the specific "wishes" within them---such as health care reform, and energy and education initiatives---to actually come true, Congress will have to create, introduce, vote on and pass specific legislation. Budgets don't create law; they just offer a budget and guidelines.

3. Now the House and Senate must reconcile and compromise their budgets...into one. Then they get into legislation (see number 2 above).

4. President Obama released an Official Statement regarding the passage of the House and Senate budgets:

Tonight, the House of Representatives took another step toward rebuilding our struggling economy. This budget resolution embraces our most fundamental priorities: an energy plan that will end our dependence on foreign oil and spur a new clean energy economy; an education system that will ensure our children will be able to compete in the economy of the 21st century; and health care reform that finally confronts the back-breaking costs plaguing families, businesses and government alike. And by making hard choices and challenging the old ways of doing business, we will cut in half the budget deficit we inherited within four years. With this vote comes an obligation to pursue our efforts to go through the budget line-by-line, searching for additional savings. Like the families we serve, we must cut the things we don't need to invest in those we do.”

Tonight, the Senate has joined the House of Representatives in taking an important step toward rebuilding our struggling economy.

5. We all know where the government gets its revenue: taxpayers. So the GOP can chortle all it likes about how this "taxes and spends too much" but the truth is, they can't propose anything any better in the end (and forgive my enormous guffaw at the McCain plan *cough* Sheriff of Nottingham *cough*) and the bottom line is that we're all going to have to cough up something and cut other things.

Comments

[Sarah Burkett]

The only thing I'm finding funny on this whole fight between Democrats and Republicans in Congress is the fact that stuff is still getting done, no matter how much the Republicans attempt to block it. And all these men and women are doing is making themselves look like fools and are begging their states to replace them come the next elections.

[Sean]

Regarding your things to consider #1, last bullet. I'm no Bush fan, particularly his free-spending ways, but two wrongs don't make a right. Bush's doubling of the debt will look like a drop in the bucket when we look back from 2012.
http://blog.heritage.org/wp-content/uploads/2009/03/wapoobamabudget1.jpg

[Julie Pippert]

Sean, my point with that point was to remind everyone we started from behind zero, here. Current implication from some corners is that Obama created this mess. The finger pointing is in error and regardless of my thoughts, his intent is to fix. I'm focusing on that.