In New Budget, Senate Democrats Offer Alternative Political Vision

Nancy Cook
National Journal

For the first time since 2009, Senate Democrats on Wednesday introduced a budget resolution, which promised to stabilize the debt over the next decade and raise new revenue and cut spending in equal parts.

“We believe that in order to truly tackle our economic and fiscal challenges in the real world, and not just make them disappear on paper, we need a strong foundation for growth built from the middle out,” said Budget Committee Chairwoman Patty Murray of Washington, in an opening statement before her committee.

But, more than anything, the Senate Democrats’ budget was meant to land as a political counterpunch to the House Republican plan, an alternative political vision in a week of dueling budget blueprints.

While the House Republicans saw their budget as an opportunity to make deep spending cuts, cap Medicaid and food-stamp spending, and turn Medicare into a program with a defined benefit in 2024, the Senate Democrats saw their budget release as another shot to argue for short-term economic stimulus coupled with long-term concerns about the deficit and tweaks to health care programs.

In short, the economic question illuminated by the two plans comes down to this: How soon, if at all, does the country need to worry about balancing the budget?

Senate Democrats answered that question by putting forth a plan that stabilizes the debt held by the public to roughly 70 percent of gross domestic product by 2023, without proposing any major overhaul of the entitlement programs. By the end of the decade, under the Senate Democrats’ calculations, the annual deficit projection for 2023 would be $566 billion.

The health care savings they put forth—$275 billion—is not as much as the $400 billion in Medicare and Medicaid cuts that President Obama proposed during previous fiscal negotiations.

Many of the policy proposals contained in the Senate Democrats’ budget hew to familiar party talking points. The resolution calls for $975 billion in new revenue through the closing of unspecified tax loopholes that benefit the wealthy; $100 billion in stimulus-like spending for school infrastructure, job training, and other programs; and a full replacement of the $1.2 trillion in across-the-board sequester cuts that began to take effect in March.

The proposal also seeks to cut spending by $975 billion. The reductions could come in the form of $265 billion in yet-to-be-specified cuts from Medicare over the next decade, although no cuts from beneficiaries; $10 billion in Medicaid reductions; $240 billion in reduced defense spending; $142 billion in lower spending on nondefense discretionary programs; $242 billion in savings from interest payments; and another $76 billion in mandatory spending cuts.

The biggest rub is that the Senate Democrats’ plan is somewhat vague, leaving many of the decisions about closing tax loopholes or the specifics of spending cuts to various Senate committees, including a huge volley of decisions to the Senate Finance Committee, chaired by Max Baucus, D-Mont.

Baucus argued last week that the budget resolution should not include instructions for tax reform, as it does, because that would impede the process of overhauling the tax code in 2013 or 2014 in a comprehensive way. An overhaul is one of his major goals and one he shares with his Republican counterpart on the House Ways and Means Committee, Chairman Dave Camp of Michigan.

By Wednesday afternoon, Republicans had yet to fully digest the Senate Democrats’ proposal. They did not receive a full copy of the plan until late Wednesday afternoon after the committee meeting.

In early cursory reviews, Budget Committee ranking member Jeff Sessions, R-Ala., criticized the Senate Democrats’ proposal because it did not balance the budget in 10 years, as the House GOP plan does. Sen. Chuck Grassley, R-Iowa, also pointed out that there was no way to cut $1 trillion in tax loopholes or breaks without hitting the middle class.

Senate Budget Committee aides said they expected the plan to receive the support of every Democrat on the panel.