Democratic budget protects oil, gas, and Sen. Landrieu
18th March 2013 · 0 Comments
By Christopher Tidmore
It would have only taken one vote for the Democratic Budget to be killed in Senate committee, and Washington’s Patty Murray seriously worried that allies of Louisiana’s Mary Landrieu might have provided it.
Landrieu, facing a tough re-election in 2014, feared that Murray’s pursuit of eliminating deductions, exclusions or credits in the tax code would single out oil and gas tax breaks.
Guy Cecil, executive director of the Democratic Senatorial Campaign Committee, had gone so far as to suggest that voting for the plan could be a liability for red-state Democrats in general, not only Landrieu, but Kay Hagan (N.C.), Mark Pryor (Ark.), and Mark Begich (Alaska). That could become a problem for Senate majority leader Harry Reid, since Democrats can afford to lose only five votes if they hope to pass their budget.
Instead Senate Budget Chairman Patty Murray left vague her call for the elimination of $975 billion in tax deductions, exclusions or credits, saying nothing about oil and gas. Getting the support of all 12 committee members who caucus with Democrats – including Sens. Bernie Sanders (I-Vermont), Angus King (I-Maine) – was a priority for Murray.
A key ally of Landrieu’s Senator Mark Warner (D-Virginia) also voted ‘yea.’ Some Democrats worried he might not have, blocking the measure to protect his fellow Southern centrists. It would have only taken a sole defection to stop the budget in its tracks as GOP panel members all voted no.
The Senate budget instructs the Senate Finance committee to reform the tax code by October 1. The mandates are vague, however, requiring simply that the tax code reform reduce deficits through upping revenues by $975 billion. Marking a difference from the House GOP budget, the Democratic proposal calls on the tax code to remain as progressive as it is now, in terms of the difference between the lowest and highest tax brackets.
The budget also does not call for — or rule out — a minimum tax on millionaires, known as the Buffett Rule. While Sanders and many other liberals favor that measure, centrist and conservative Democrats, including Pryor and Landrieu have expressed serious reservations.
Unlike the Republican budget authored by House Chairman Paul Ryan of Wisconsin, Senate Democratic plan rejected the Republican vision for greater austerity and balancing the Federal Budget in 10 years. It included $100 billion in new stimulus spending, an increase in spending roughly equal to the amount proposed in new taxes.
In other words, the Democratic proposal does not reduce the deficit to the same degree as the House GOP proposal, nor approaches balance in the next decade. As the Hill newspaper noted, the budget contains only 11 pages focused on spending cuts, compared to 39 pages focused on detailing $100 billion in new economic stimulus spending.
That spending includes $50 billion in high priority infrastructure repairs, $10 billion for ports, $10 billion for an infrastructure bank, $20 billion for technology infrastructure and $10 billion for worker training.
The text lambastes the House GOP budget, arguing Democrats are protecting the middle class from “draconian” cuts.
In point of fact, President Obama who has put off introducing a budget of his own, actively dismissed the need for immediate deficit reduction as unnecessary on Wednesday. The White House has expressed an openness to a deal on entitlement reform, something that Murray’s Senate budget specifically rejected.
Murray’s budget does call for $265 billion in cuts to Medicare. It recommends selling off 14,000 excess properties, reducing improper payments and consulting Government Accountability Office studies to find more cuts.
It would reduce the budget deficit from $891 billion this year to $566 billion in 2023. The budget turns off the $960 billion in sequester cuts over nine years, and would cut $142 billion in non-defense discretionary spending by extending existing ceilings on spending for two years at the end of the 10-year budget window.
The budget cuts $76 billion in “other mandatory” spending including $23 billion from farm payments. It cuts $240 billion from base defense spending — keeping about half the cuts called for by sequestration.
Overall, Murray’s budget appears to cut between $650 billion and $1.85 trillion from deficits, depending on which baseline math is used. The budget has yet to be officially scored.
Murray claimed to the Hill newspaper that her budget cuts $1.85 trillion from deficits. This figure does not count turning off $960 billion in sequester cuts and it includes $240 billion in interest savings. Democrats say that this 2.2 percent deficit to gross domestic product ratio is sustainable because it is smaller than the estimated growth rate of the economy.
The GOP House proposal, introduced on Tuesday, aims to balance the budget in ten years. Paul Ryan’s plan lowers spend by $4.6 trillion through 2023, in large part by rolling back many of Mr. Obama’s signature legislative accomplishments. The House Budget Committee Chairman’s proposal does away with the Affordable Care Act of 2009, eliminating the subsidized insurance exchanges and Medicaid expansion that make up the core of the law. It also allows Medicare recipients the option of a voucher to purchase private heath insurance—making it similar to the healthcare plans federal employees receive.
The Republican budget also eliminates exclusions and credits, yet Ryan seeks to use the added funds to lower tax rates to just two, 10 percent and 25 percent, from the current seven. Unlike the Democratic plan, Ryan’s budget was revenue neutral, and rejected President Obama’s call for “a balanced approach.” He was just as vague as Murray as to what tax exclusions or credits he plans to cut to lower those rates, though, his plan benefits for counting the added $600 billion in new taxes passed over a month ago.
A tax increase Republicans bitterly opposed. Then again, Murray included many of the sequester cuts that Democrats opposed.
Neither partisan budget proposal seeks changes in Social Security.
This article originally published in the March 18, 2013 print edition of The Louisiana Weekly newspaper.