Senate Passes $3.7 Trillion Budget, Setting Up Contentious Negotiations

The 50-to-49 vote in the Senate, which is controlled by Democrats, sets up contentious — and potentially fruitless — negotiations with the Republican-controlled House in April to reconcile two vastly different plans for dealing with the nation’s economic and budgetary problems. No Republicans voted for the Senate plan, and four Democrats opposed it: Mark Pryor of Arkansas, Kay Hagan of North Carolina, Mark Begich of Alaska and Max Baucus of Montana. All four are from red states and are up for re-election in 2014.

“The Senate has passed a budget,” Senator Patty Murray of Washington, the Senate Budget Committee chairwoman, declared at 4:56 a.m.

The House plan ostensibly brings the government’s taxes and spending into balance by 2023 with cuts to domestic spending even below the levels of automatic across-the-board cuts roiling federal programs now, and it orders up dramatic and controversial changes to Medicare and the tax code.

The Senate plan, by contrast, includes $100 billion in upfront infrastructure spending to bolster the economy and calls for special fast-track rules to overhaul the tax code and raise $975 billion over 10 years in legislation that could not be filibustered. Even with that tax increase and prescribed spending cuts, the Senate plan would leave the government with a $566 billion annual deficit in 10 years, and $5.2 trillion in additional debt over that window.

“The first priority of the Senate budget is creating jobs and economic growth from the middle out, not the top down,” Ms. Murray said. “With an unemployment rate that remains stubbornly high, and a middle class that has seen their wages stagnate for far too long, we simply cannot afford any threats to our fragile recovery.”

Republicans were harshly dismissive of the Democrats’ priorities. “Honest people can disagree on policy, but where there can be no honest disagreement is the need to change our nation’s debt course,” said Senator Jeff Sessions of Alabama, the committee’s ranking Republican. “The singular truth that no one can escape is that the House budget changes our debt course while the Senate budget does not.”

Passage of the competing spending plans does advance a more orderly budget process after nearly three years of crises and brinkmanship. If House and Senate negotiators can agree on a framework for overhauling the tax code and entitlement programs like Medicare, Congress’s committees could go to work on detailed legislation, possibly under special rules that protect the bills from a Senate filibuster.

If the negotiations prove fruitless, the next budget crisis looms this summer when Congress must again raise the government’s statutory borrowing limit or risk defaulting on the federal debt. On Thursday, House Speaker John A. Boehner of Ohio revived a rule — breached in January — that any increase in the debt ceiling must be accompanied by equivalent spending cuts.

Final passage of the Senate budget was upstaged by the process that got the senators to it, a marathon session known since 1977 as the budget “vote-a-rama.” More than 500 amendments were filed, and 70 were voted on. Those numbers dwarf previous marathon voting sessions, reflecting pent-up Republican demand for votes and a new, uncompromising view of procedure on the part of Tea Party-backed senators.

The amendments were advisory only, but they put the Senate on record on a dizzying variety of subjects, including limiting the regulation of sage grouse, preventing the United Nations from infringing on Americans’ right to bear arms, repealing a tax on medical devices that helps finance the president’s health care law and building the Keystone XL pipeline.

By 4 a.m., the senators were sitting quietly in their seats, plowing through amendments like sleepy schoolchildren, breaking only to give the Senate pages a standing ovation and to grumble when a senator demanded a roll-call vote if a voice vote would suffice. As the senators recorded their final votes, they hastily left for a two-week spring recess.

But the sleepy bonhomie did not bridge the divide between the parties. Senate Republicans and Democrats could not even agree on what was in the Democratic budget. Ms. Murray said the plan matched its $975 billion in revenue increases with cuts and interest savings of equal size. But Republicans said it did not, since it reversed $1 trillion in across-the-board cuts but did not count that against their spending cuts.

Those differences did not lend themselves to much optimism about the coming budget negotiations. “The only good news is that the fiscal path the Democrats laid out in their budget resolution won’t become law,” said Senator Mitch McConnell of Kentucky, the Republican leader.

View the original article here

Pelosi flexes muscle as House Democrats prepare for final debt ceiling negotiations (The Ticket)

(Alex Brandon/AP)

House Minority Leader Nancy Pelosi has so far played a minor, background role in the negotiations between President Obama and congressional Republicans over raising the debt ceiling. But she sought to change all that Friday, in a private meeting with Obama to drive home her earlier pledge to oppose any deal that cuts the nation's entitlement programs.

Pelosi emerged from a meeting with House Democrats Friday to announce that they remain "firm" in their commitment to keep Social Security, Medicaid and Medicare free from cuts.

One day earlier, Pelosi made clear that many House Democrats fervidly oppose the White House's bid to place cuts to Medicare, Medicaid and Social Security on the table during the debt-ceiling talks. Republican leaders, meanwhile, say they won't proceed with negotiations unless such cuts are included, together with provisions to restrain the future growth of government spending.

"We do not support cuts in benefits for Social Security and Medicare," Pelosi said. "Any discussion of Medicare or Social Security should be on its own table. I have said that before. You want to take a look at Social Security? Then look at it on its own table. But do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in our country."

It isn't surprising to see the former Speaker flex a little muscle. Through all the big deals negotiated between Republicans and the White House--even the one that extended Bush-era tax rates, which happened while House Democrats still held the  majority and Pelosi was Speaker of the House--she often found herself sitting on the bench, waiting to be called into the game. Now the country is faced with a dilemma that will need her to help fix it--and she's understandably squeezing every bit of leverage she can out of the situation.

The details of the deal are still pending, but both parties are examining ways to reduce federal spending by $4 trillion over the next  10 years. Obama earlier this week said he would consider including the entitlement programs in those cuts, an admission that has received little support from his party.

Members of the House Progressive Caucus have remained the most vocal about their opposition to the deal. Caucus leaders sent a letter to Obama Thursday urging him to strip entitlements from the negotiations, or risk losing Democratic support.

"Not only am I not going to vote for it, I am going to whip my caucus as hard as I can to persuade them not to support it," House Progressive Caucus co-chair Rep. Keith Ellison told the Minnesota Post.

Rank-and-file members are also primed to go to battle over entitlements.

"You want a fight?" said Rep. John Garamendi (D-CA) recently during a press conference. "If anybody in this building wants to take on Social Security—privatize it, change the benefits by altering the Consumer Price Index or by any other method—know this: You've got a fight on your hands."

Still, at least some Democratic lawmakers actually do support at least one of the measures Garemendi cited: reducing benefits by indexing them to the Consumer Price Index. As  Talking Points Memo reporter Brian Beutler points out, congressional Democrats have indicated some backing for an approach to altering Social Security in a way that would reduce benefits without the measure necessarily qualifying as a "cut." By pegging the Cost of Living Adjustments to a lower inflation estimate, Congress could, technically, reduce spending for the program and avoid at least some of the political fallout that would come with deeper outright cuts to the program.

Of course, since the exact details of the deal remain behind closed doors, much of the talk at this point is mere posturing. The true moment of reckoning will come for both sides as more concrete details surface over the next few days.

It's still unclear whether House Speaker John Boehner will even be able to secure votes from a wide majority of Republicans. So for this thing to pass, it will need every Democratic vote it can get. And Pelosi knows it.

View the original article here