On Thursday March 16^th, the Senate narrowly passed its $2.8 trillion FY2007 budget resolution by a vote of 51-49 – mostly along party lines (one Democrat supported it and five Republicans voted against it).  Although the resolution still falls short in many ways, the debate over this year’s budget indicates that many Senators are getting the message that investments in health, education, and human needs programs are important and that the deep cuts proposed by the President are unacceptable. 

By a vote of 73-27, the Senate adopted an amendment offered by Senators Specter (R-PA) and Harkin (D-IA) that added $7 billion to the total funding for annually appropriated (“discretionary”) programs—bringing the funding level back to FY2005 levels (not adjusted for inflation).  The Senate also passed an amendment offered by Sen. Jack Reed (D-RI) to increase funding for the Low Income Home Energy Assistance Program (LIHEAP) by $3.3 billion.  In addition, the Senate defeated efforts to force a new round of reconciliation cuts and to place a draconian freeze on discretionary spending that could only be lifted by a 2/3 majority vote.

Despite these successes, the Senate budget resolution remains problematic. Because of continuing tax cuts and increases in defense and homeland security spending, the resolution will increase the deficit by roughly a quarter trillion dollars over the next five years.  Funding for domestic discretionary programs, although increased by the amendments mentioned above, remains far below what is needed to meet current needs and even below what is needed to maintain current service levels because of the impact of inflation.  In addition, the resolution failed, on a 50-50 vote (with all Democrats and 5 Republicans voting in favor), to restore a balanced PAY-GO (Pay-As-You Go) budget requirement that would have required both tax cuts and spending to be offset or “paid for” in order to reduce deficits.  The full PAY-GO budget rules, which were in effect until 2002, were a major factor in bringing the budget into balance during the late 1990s.  However, most Republicans now oppose PAY-Go because it would limit their ability (by requiring 60 votes to pass anything that would add to the deficit) to pass additional tax cuts—even though tax cuts remain the single largest factor contributing to current deficits and are keeping our nation from being able to make needed investments in health, education and training, and programs that help promote opportunity for all.

Taxes and spending are simply two sides of the same coin and while it is heartening that members of Congress are beginning to recognize the harmful impact of the spending cuts, many still refuse to accept the problems that the imbalanced tax cuts of 2001 and 2003 have caused.  Unless these tax policies are revisited, the continuing revenue decline will lead to deeper deficits and efforts to cut spending further.

What’s Next?

The House of Representatives, facing protests from many moderate Republicans over proposed spending cuts, has delayed its work on its budget resolution.  The House Budget Committee is expected to “mark-up” the budget resolution the week of March 27^th and the full House should vote on the resolution shortly after.  It is likely that the House resolution will closely follow the President’s budget request, but it is unclear whether enough moderates will object to the cuts to force votes on amendments similar to those passed in the Senate or even to defeat the resolution altogether.  In recent years, the House votes related to the budget have been very close (margins of only a handful of votes) and in an election year, many members are worried about the impact of spending cuts on their districts.

Should the House pass its budget resolution, the Senate and House will have to form a conference committee to work out the differences between the House and Senate versions.  The committee will try to produce a final budget resolution conference report, which must then be passed again by both the House and Senate in order to go into effect. Over the past several years, these conferences on the budget resolution have become increasingly difficult as disagreements between the House and Senate have increased (note the prolonged debate and difficulty in passing the reconciliation spending cuts).  Some analysts expect that an agreement may not be reached this year, which will complicate the budget process further but also reinforce the need for a fundamental shift in priorities.  For a refresher on the budget process, please visit our “About the Budget Process” page.

It is important to remember that the budget resolution is not a law (it is not signed by the president) and it does not dictate the specific funding levels for individual programs; rather, it serves as a blueprint for congressional spending and sets the boundaries for the annual appropriations process.  This blueprint, however, remains an incredibly powerful articulation of our national priorities and values and it provides the fundamental framework for what Congress is able to do and how our government operates.  The National Advocacy Center continues to push for a more just and compassionate budget that recognizes the needs and responsibilities of our society to promote the common good and economic justice, care for and empower the most vulnerable in our nation, provide opportunity for all, and to promote peace and reconciliation in the global community.  We hope that you will continue to speak out also to keep the momentum for more moral budgeting going!

          Action Needed:           

Write to your Representative and urge him/her to:

1. Oppose any budget that will force cuts in critical social services;

2. Oppose cuts to entitlement programs such as Medicaid, Medicare, Food Stamps, and other social services (some conservative Republicans are pushing for another round of reconciliation spending cuts)

3. Oppose additional tax cuts that deepen the deficit and take funds away from needed investments.

4. Work for a better budget that will help ensure that the basic needs of all are met.

A sample letter is available at our Action Website for you to edit and send.

Additional Information

Human Needs Report, March 17^th – Coalition on Human Needs