Senate Rejects Spending Controls
The Senate is poised to pass a budget
resolution that lays the groundwork for substantial tax increases
while avoiding even minimal cuts in spending.
The Senate Budget
Committee on March 4 approved a budget resolution that took a
positive first step towards fiscal sanity. Under the leadership of
Chairman Don Nickles (R-OK), the Budget Committee's budget
resolution, if enacted, would:
- Assure that
legislation preventing tax increases for parents, married couples,
and low-income earners would be protected from a filibuster;
- Cap 2005
discretionary spending at $814 billion, a 3.3 percent increase over
- Call on Senate
committees to weed out waste, fraud, and abuse in their mandatory
But with the
budget resolution now being debated on the Senate floor, all three
of these provisions are in danger. It appears possible that the
full Senate could:
to keep tax cuts in place. Unless lawmakers act this year, the
child tax credit will be reduced, the marriage penalty reinstated,
and the 10 percent income tax bracket will be increased to 15
percent. The Senate Budget Committee sought to prevent a
minority-led filibuster by including reconciliation instructions
for extending these tax cuts. Some reports suggest the Senate may
remove these reconciliation instructions, which means extending
these tax cuts would require 60 votes rather than a simple
In addition, aproposal by Senator Russ Feingold (D - WI) would
bring back the PAYGO requirement that all new tax cuts and
mandatory spending increases be offset by equivalent spending cuts
in mandatory programs like Medicare or Social Security, or other
tax increases. Note that these restrictions were not in
place last year when Congress enacted the huge Medicare drug bill -
the largest mandatory spending expansion in forty years. But now
that the debate has shifted from spending increases to tax cuts,
Senators are suddenly demanding offsets. And given Congress'
resistance to mandatory spending cuts - they cannot even agree to
cut waste, fraud, and abuse - this legislation would virtually
guarantee that most of the recent tax cuts would expire and
Americans would see substantial tax increases over the next
UPDATE: The Feingold Amendment was agreed to, 51-48.
discretionary spending from $814 billion to $821 billion. This
4.3 percent increase over 2004 levels would be on top of the 39
percent increase these programs received over the previous three
years. It is also $7 billion more than the 2005 discretionary
spending cap the Senate enacted just a year ago. While lawmakers
argue that the additional spending is needed for defense, they
should take a cue from millions of families by balancing
high-priority spending increases with cuts in lower-priority
UPDATE: This amendment, offered by Senator John Warner
(R-VA), was agreed to, 95-4.
to eliminate waste, fraud, and abuse in mandatory programs.
Mandatory spending is growing by 7 percent annually, and is
projected to overwhelm the federal budget when the baby boomers
retire. Yet Senator Nickles' modest proposal to cut $3 billion in
waste from these programs may not survive the Senate debate.
UPDATE: This amendment, offered by Senator Max Baucus
(D-MT), was agreed to, 53-43.
Brian Riedl is Grover M. Hermann Fellow in Federal Budgetary
Affairs in the Thomas A. Roe Institute for Economic Policy Studies
at The Heritage Foundation.