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.

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Exclusive: Democrats seek up to $3 trillion in budget savings (Reuters)

WASHINGTON (Reuters) – Democrats are proposing $2.5 trillion to $3 trillion in measures to reduce the budget deficit, including revenue increases and significant cuts to Medicare, congressional aides told Reuters.

The plan was unveiled on Tuesday at a closed-door meeting of a special 12-member congressional panel, the so-called "super committee" that is tasked with finding at least $1.2 trillion in deficit reduction over 10 years.

It was the first formal proposal by Democrats on the committee and is aimed at galvanizing talks that are quickly running up against a November 23 deadline.

The congressional aides did not say why Democrats were proposing such a big deal, but Democratic congressional leaders have repeatedly called on the committee to go beyond its mandate to fix the country's fiscal mess.

According to congressional sources, the plan includes a roughly equal mix of spending cuts and revenue increases; between $200 billion and $300 billion in new economic stimulus spending that would be paid for with lower interest payments from reducing deficits; and around $400 billion in Medicare savings, with half coming in benefit cuts and the other half in cuts to healthcare providers.

While sources portrayed the proposal as a Democratic plan, they also noted that at least one Democrat on the super committee, Representative James Clyburn, had reservations about the move to cut Medicare spending.

One of the congressional sources said Republicans on the committee did not react favorably to the Democratic plan.

Republicans have long been opposed to more economic stimulus spending and increasing revenues in deficit-reduction efforts.

(Editing by Sandra Maler)

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