Senate Nears Pre-dawn Approval of Democratic Budget

If Senate Democrats approve a budget, it will be their first in four years

By Andrew Taylor
|  Saturday, Mar 23, 2013  |  Updated 1:58 AM PDT
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Senate Nears Pre-dawn Approval of Democratic Budget

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WASHINGTON - OCTOBER 14: The early morning sun begins to rise over the U.S. Capitol building October 14, 2008 in Washington DC. Earlier today President Bush met with the President's Working Group on Financial Markets at the White House. (Photo by Mark Wilson/Getty Images)

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An exhausted Senate neared approval early Saturday of a $3.7 trillion budget for next year that will let majority Democrats highlight their fiscal priorities, but won't resolve the deep differences the two parties have over deficits and the size of government.

Senators sorted through a final batch of amendments and were on course to approve the measure in the pre-dawn hours and leave town for a two-week spring recess. The non-binding plan would shrink annual federal shortfalls over the next decade to nearly $400 billion, raise taxes by nearly $1 trillion and cull modest savings from domestic programs.

In contrast, a rival budget approved by the GOP-run House balances the budget within 10 years without boosting taxes.

That plan — by House Budget Committee Chairman Paul Ryan, R-Wis., his party's vice presidential candidate last year — claims $4 trillion more in savings over the period than Senate Democrats by imposing major cuts in Medicaid, food stamps and other safety net programs for the needy. It would also transform the Medicare health care program for seniors into a voucher-like system for future recipients.

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"We have presented very different visions for how our country should work and who it should work for," said Sen. Patty Murray, D-Wash., who chairs the Senate Budget Committee. "But I am hopeful that we can bridge this divide."

Congressional budgets are planning documents that leave actual changes in revenues and spending for later legislation, and this was the first the Democratic-run Senate has approved in four years. That is testament to the political and mathematical contortions needed to write fiscal plans in an era of record-breaking deficits that until this year exceeded an eye-popping $1 trillion annually, and to the parties' profoundly conflicting views.

"I believe we're in denial about the financial condition of our country," Sen. Jeff Sessions of Alabama, top Republican on the Budget panel, said of Democratic efforts to boost spending on some programs. "Trust me, we've got to have some spending reductions."

Though the shortfalls have shown signs of easing slightly and temporarily, there is no easy path to the two parties finding compromise — which the first months of 2013 have amply illustrated.

Already this year, Congress has raised taxes on the rich after narrowly averting tax boosts on virtually everyone else, tolerated $85 billion in automatic spending cuts, temporarily sidestepped a federal default and prevented a potential government shutdown.

By sometime this summer, the government's borrowing limit will have to be extended again — or a default will be at risk — and it is unclear what Republicans may demand for providing needed votes. It is also uncertain how the two parties will resolve the differences between their two budgets, something many believe simply won't happen.

Both sides have expressed a desire to reduce federal deficits. But President Barack Obama is demanding a combination of tax increases and spending cuts to do so, while GOP leaders say they won't consider higher revenues but want serious reductions in Medicare and other benefit programs that have rocketed deficits skyward.

Obama plans to release his own 2014 budget next month, an unveiling that will be studied for whether it signals a willingness to engage Republicans in negotiations or play political hardball.

In a long day that began Friday morning, senators plodded through scores of amendments — all of them non-binding but some delivering potent political messages.

They voted in favor of giving states more powers to collect sales taxes on online purchases their citizens make from out-of-state Internet companies, and to endorse the proposed Keystone XL pipeline that is to pump oil from Canada to Texas refineries.

They also approved amendments voicing support for eliminating the $2,500 annual cap on flexible spending account contributions imposed by Obama's health care overhaul, and for charging regular postal rates for mailings by political parties, which currently qualify for the lower prices paid by non-profits.

In a rebuke to one of the Senate's most conservative members, they overwhelmingly rejected a proposal by Sen. Rand Paul, R-Ky., to cut even deeper than the House GOP budget and eliminate deficits in just five years.

The Democratic budget envisions $975 billion in unspecified new taxes over the coming 10 years. There would be an equal amount of spending reductions coming chiefly from health programs, defense and reduced interest payments as deficits get smaller than previously anticipated.

This year's projected deficit of nearly $900 billion would fall to around $700 billion next year and bottom out near $400 billion in 2016 before trending upward again.

Shoehorned into the package is $100 billion for public works projects and other programs aimed at creating jobs.

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