Balanced Approach?

Mar 11, 2013

Wanted to make sure you saw this in The Hill this morning… According to Budget Chair Patty Murray, Senate Democrats’ budget “will do more to raise revenue than to cut spending and it will not end deficits.” Senate Democrats expect defections on budget vote.

FYI –

  • They have signaled that their budget will do more to raise revenue than to cut spending and that it will not end deficits.
  • Even if Murray gets her bill through committee, it will face more challenges on the Senate floor. A bill that raises taxes but does not cut deeply enough into spending could run into opposition from conservative Democrats, especially those facing reelection in 2014.

Senate Dems strain to get budget over finish line by Easter recess
The Hill
Erik Wasson & Bernie Becker
March 11, 2013
http://ow.ly/iKlPR

Senate Democrats say they will soon pass their first budget in four years, but it is proving a test.

Disputes over tax cuts, spending reductions and entitlement reform all present challenges to Budget Committee Chairwoman Patty Murray (D-Wash.) and Majority Leader Harry Reid (D-Nev.).

The Democrats’ narrow 12-10 majority on the panel means one defection would mean failure, if Republicans stick together as expected.

There is more leeway on the Senate floor because budget resolutions cannot be filibustered and Democrats control 55 seats. Still, the party can afford to lose only five votes before Vice President Biden’s deciding ballot would likely become necessary.

Leaders also must steel their members against dozens of poison pill amendments the GOP is preparing to slip into the budget mix.

Murray, who took over the Budget panel this year, hopes to move legislation through the committee by Thursday. So this week is critical.

Senate Democrats are tired of the GOP taunts over their failure to pass a budget since 2009 — it is one of Congress’s primary duties — and are determined to get a 10-year measure through the Senate before the Easter recess starts on March 22.

They have signaled that their budget will do more to raise revenue than to cut spending and that it will not end deficits. In a memo, Murray adumbrated the justification for this by noting that Congress has already approved $1.8 trillion in spending cuts since 2010 but only $600 billion in new taxes.

Sen. Chris Coons (D-Del.), a panel member, said he’s confident Murray will “secure the support of not just our committee, but our caucus.”

Confidence was boosted by the 2012 election in which Democrats gained seats and President Obama won a second term while promising higher tax rates on the wealthy.

In February, 52 Democrats supported their sequester-replacement bill, which also would have raised taxes on the wealthy, rather than the 60 that it needed to pass.

Aides argue that losing only three members on the sequester replacement, which also cut farm subsidies, bodes well for Democrats ability to rally around their budget.

One reason Senate Democrats did not pass a budget bill for the past four years was that they wanted to avoid unpopular votes to cut spending and hike taxes.

Leadership aides say Democrats from red states are less nervous now.

“The 2012 election showed that being in favor of revenue does not tar and feather you as a tax-and-spend liberal,” one aide said.

Another said: “We are on the offensive. A couple of years ago [we] may have felt more on the defensive about the budget.”

The first hurdle is a vote by the budget panel, where Independent Sen. Bernie Sanders (Vt.) plays a vital role.

Sanders, who caucuses with Democrats, adamantly resists any entitlement benefit cuts and is pushing for big tax increases in the bill.

Yet even as Murray deals with him, she must also win over centrist Democrats such as Sen. Mark Warner (D-Va.).

In the last Congress, Warner wanted to lock cuts to Medicare and Social Security into a budget. He opposes cuts to the military, which is Sanders’s principal target.

Murray must somehow win over both sides.

“It’s hard. Very hard,” Sanders acknowledged between budget meetings on Thursday, shaking his head.

Sen. Ron Wyden (D-Ore.), a committee member, elaborated, saying: “A Senate budget debate is never for the faint of heart and this year is going to be especially difficult.”

Wyden presents another problem for Murray: whether to include detailed tax instructions in the bill that would expedite tax reform through a process called reconciliation, which precludes a filibuster.

This is opposed by Senate Finance Committee Chairman Max Baucus (D-Mont.), who told Murray he does not want his hands tied by the budget as he crafts a plan for tax reform.

Even if Murray gets her bill through committee, it will face more challenges on the Senate floor.

A bill that raises taxes but does not cut deeply enough into spending could run into opposition from conservative Democrats, especially those facing reelection in 2014.

Sen. Mark Pryor (Ark.), a target for Senate Republicans in next year’s election, was one of three Democrats who opposed the sequester-replacement bill. He opposes establishing a minimum tax on millionaires unless it is part of a major deficit-reduction plan that also cuts entitlements.

“I think it’s going to be a difficult challenge for Sen. Murray and others to get a budget out of the committee that will get sufficient votes to pass the Senate,” Pryor said last week.

Sen. Mary Landrieu (D-La.) is also up for reelection, but unlike Pryor wants a budget heavily tilted toward raising taxes on those deemed wealthy. She wants more tax hikes and smaller cuts to discretionary spending.

“Not every member agrees with me but I think most of the members agree with me, and I think that many Democrats are willing to follow the president’s balanced approach,” she said.

Sen. Jon Tester (D-Mont.) does not want to see discretionary spending cut heavily. He said he has a worry list “pretty damn long, quite frankly” about agency budgets.

Yet other senators are keen to see substantial spending cuts.

Sen. Mark Begich (D-Alaska), another facing an election in 2014, said he has “made it very clear to the leadership that I am looking very carefully at spending and I want to see it reduced.”

The specifics of tax policy create other landmines.

Murray is expected to target “tax loopholes,” some of which are supported by key Democrats.

Landrieu, for example, does not want energy tax breaks singled out for demolition. She voted against the sequester-replacement bill for that reason.

Aides say Murray will try to use vague language on taxes to win over senators outside the budget panel.

But that will not guarantee votes from senators such as Landrieu, who are being warned that vague language could camouflage an intent to hit the oil-and-gas industry.

As Senate Democrats slog forward, so will House Republicans, who face their own challenges in winning approval of Rep. Paul Ryan’s (R-Wis.) budget, which is expected out this week.

Reconciling the Senate and House budgets will be close to impossible. Ryan promises his will achieve balance in 10 years, while Senate Democrats include no date certain but say their budget would put the nation on a sustainable path.

“I’m anticipating that I’m going to be Goldilocks, and that the House is going to be way too hot,” said Sen. Claire McCaskill (D-Mo.), who won reelection last year in her conservative-leaning state. “And the Senate is going to be too cold, and that I will want something in the middle.”

 

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