Budget Resolution Ready for Floor Action

This week, both the House and Senate Budget Committees approved their versions of the FY2006 budget resolution, paving the way for floor action next week. While both versions would provide the administration’s request of $843 billion in discretionary spending in FY2006, they differ on tax cuts, reconciliation savings, and mandatory spending cuts.

House Committee Consideration

On March 9, the House Budget Committee approved, 22-15, the FY2006 budget resolution (as-yet-unnumbered). As requested by the administration, the resolution would provide $843 billion for discretionary spending in FY2006.

The resolution proposes to extend through 2010 several tax provisions included in the 2003 tax law (P.L. 108-27) that are set to expire in 2007 and 2008. These include: the accelerated increase in the child tax credit, the expansion of the 10 percent income tax bracket, and the expansions of the standard deduction and 15 percent income tax bracket for married taxpayers filing jointly. In total, the resolution would provide $106 billion in tax cuts over five years.

The resolution also directs the House Agriculture, Education and the Workforce, Energy and Commerce, Financial Services, Judiciary, Resources, Transportation and Infrastructure, Veterans’ Affairs, and Ways and Means Committees to find $68.6 billion in mandatory spending cuts over five years.

In FY2006, the resolution would provide $32.4 billion for international affairs; $78.1 billion for education, training, employment and social services; and $51 billion for health care programs.

To address the ongoing cost of the war in Iraq, the resolution would include a $50 billion reserve for supplemental appropriations.

The committee approved one amendment by voice vote that would transfer $1.15 billion in discretionary funding from the international affairs account to the veterans’ benefits and services account. The amendment was sponsored by Rep. Jeb Bradley (R-NH).

The following amendments were rejected:

• By voice vote, an amendment by Rep. Harold Ford (D-TN) that would have increased funding for education, training, employment and social services by $4.5 billion by ending the deferral of income tax paid on overseas profits by companies;
• By a vote of 15-21, an amendment by Rep. Lois Capps (D-Ca) that would have deleted a provision instructing the Energy and Commerce Committee to cut mandatory spending by $20 billion by ending the deferral of income tax paid on overseas profits by companies;
• By a vote of 15-22, an amendment by Rep. Rosa DeLauro (D-CT) that would have increased spending for income security by $2 billion. The increase would have expanded child care assistance, in addition to other programs;
• By a vote of 15-22, an amendment by Rep. Tom Allen (D-ME) that would have established a reserve fund for savings that would result from allowing the secretary of Health and Human Services to negotiate prescription drug prices for Medicare;
• By a vote of 12-21, an amendment by Rep. Allen that would have established a reserve fund for savings gained by ending the deferral of income tax paid on overseas profits by companies. The reserve fund would have been used to increase coverage under Medicare and the State Children’s Health Insurance Program, as well as provide health care coverage for the uninsured; and
• By voice vote, an amendment by Rep. Henry Cuellar (D-TX) that would have transferred $1.5 billion from the international affairs account to the education, training, employment and social services account to increase funding for education.

Senate Committee Consideration

On March 10, the Senate Budget Committee approved its version of the budget blueprint by a vote of 12-10. Like the House version, it would provide $843 billion for discretionary spending in FY2006.

The resolution would allow for $70.2 billion in tax cuts over five years, but grants the Senate Finance Committee discretion in determining which tax cuts would be extended or incorporated into legislation.

The resolution directs the Senate Agriculture, Nutrition, and Forestry; Banking, Housing, and Urban Affairs; Commerce, Science, and Transportation; Energy and Natural Resources; Environment and Public Works; Finance; and Health, Education, Labor, and Pensions Committees to find $32 billion in mandatory spending cuts over five years.

In FY2006, the resolution would provide $33 billion for international affairs; $92 billion for education, training, employment and social services; and $261 billion for health care programs.

Similar to the House version, the Senate budget resolution would include a $50 billion reserve for the ongoing wars in Iraq and Afghanistan.

The committee approved, by voice vote, an amendment by Sen. Mike Enzi (R-WY) that would establish a reserve fund if legislation is approved to allow the safe importation of Food and Drug Administration-approved prescription drugs. Another amendment by Sen. Jon Corzine (D-NJ) expressing the sense of the Senate that the Finance Committee should not reduce funding for Medicaid that would result in undermining the program’s role in the health care system, cap federal Medicaid spending, or shift the burden of Medicaid to the states was approved by unanimous consent.

The committee rejected the following amendments by votes of 10-12:

• An amendment by Sen. Bill Nelson (D-FL) that would have expressed the sense of the Senate that the president and Congress should work together to shore up Social Security without government borrowing;
• An amendment by Sen. Patty Murray (D-WA) that would have increased funding for veterans’ health care by $3 billion to $71 billion by closing tax loopholes;
• An amendment by Sen. Ron Wyden (D-OR) that would have allowed the federal government to negotiate lower prescription drug prices under Medicare; and
• An amendment by Sen. Murray that would have provided a $4.8 billion increase for education by closing tax loopholes.