Senate Passes a Budget
After an all-night debate on Saturday, March 23, the Senate passed its first budget in over four years. The budget blueprint, titled “Foundation for Growth: Restoring the Promise of American Opportunity” passed marginally with a final vote of 50 to 49. This concurrent budget resolution was introduced as S. Concurrent Resolution 8 by Senate Budget Committee Chairwoman Patty Murray (D-WA). Concurrent budget resolutions like this are not drafted to become law and do not require the approval or signature of the President. Instead, they are budget “blueprints” that outline congressional assumptions for spending, revenues, and the national debt. This is the first budget passed by the Senate in four years.
S. Con. Res. 8 will revise the budgetary levels for FY 2013 and will set forth the budgetary levels for FYs 2014-2023. A reconciliation instruction is included in the text; this is a provision in a budget resolution directing one or more committees to report legislation which changes existing laws, usually for the purpose of decreasing spending or increasing revenues by a specified amount and by a certain date. In Murray’s concurrent budget resolution, the Senate Committee on Finance is instructed to report changes to law by October 1, 2013 that will increase revenues by $975 billion between fiscal years 2013 to 2023. The Finance Committees’ legislation would need to pass both chambers of Congress and be signed by the President in order to become law.
The Murray proposal will repeal the sequester, but maintain the goal of reduced federal spending. The budget resolution calls for replacing sequestration with $1.85 trillion in deficit reduction that will be achieved by:
$975 billion in deficit reduction by closing loopholes and eliminating wasteful spending in the tax code (determined by the Finance Committee reconciliation instruction);
$975 billion in spending cuts:
- $240 billion in defense spending cuts to align with the drawdown of troops in overseas operations;
- $242 billion saved in reduced interest payments; and
- $493 billion of domestic spending cuts, including $275 billion in health care savings.
The budget seeks to exceed the deficits cuts proposed by the 2010 Simpson-Bowels Commission, which laid out $4 trillion in deficit reductions over the next decade. The Simpson-Bowels Commission was a Presidential Commission that sought financial stability by identifying possible cost savings in Social Security, Medicare, and other federal programs. The Commission also recommended increasing revenues, such as eliminating tax loopholes and other provisions. Since the Simpson-Bowels Commission report, $2.4 trillion in deficit reduction has been implemented. Murray’s proposal would add another $1.85 trillion to this reduction for a sum of $4.25 trillion, surpassing the original goal set by Simpson-Bowels.
S. Con. Res. 8 barely passed the Senate, with all Republicans voting against it and four Democrats voting in opposition as well. The House has passed its own budget that is in stark contrast to Murray’s proposal.
Paul Ryan’s Budget Passes in the House of Representatives
H. Con. Res. 25 proposed by Congressman Paul Ryan (R-WI) similarly passed the House of Representatives with a narrow margin of 221 to 207. This budget proposal is similar to earlier Ryan plans in that it seeks reduced tax rates and a repeal of The Affordable Care Act (Obamacare). It will maintain sequestration for discretionary spending cuts in FY 2013 in order to produce deficit reduction. For fiscal years 2014-21, the discretionary-spending reductions are achieved through caps on discretionary spending. According to the budget’s summary documents, spending caps are preferable to sequestration because spending caps allow Congress and the President to act through the appropriations process to set priorities within spending levels. Over the next decade, Ryan’s concurrent budget resolution seeks a total of $4.6 trillion in reduced deficits through these caps. Overall, the concurrent budget resolution proposed by Paul Ryan claims to balance the federal budget in 10 years.
A reconciliation instruction is also included in this concurrent budget resolution, directing eight different federal committees to identify $1 billion in deficit reduction possibilities. These committees would be required to submit these recommendations to the Budget Committee. Several committees with oversight of affordable housing programs were included:
- The Committee on Agriculture;
- The Committee on Financial Services, which has jurisdiction over HUD and RAS affordable housing programs; and
- The Ways and Means Committee, which has jurisdiction over LIHTC.
Like the Senate concurrent resolution proposed by Patty Murray, this House budget would not become law and does not need the approval of the President. It would serve as a guide to deficit reduction and lowering the national debt. However, like Murray’s budget, this proposal is highly partisan, and though it passed the Republican controlled House, it would most likely not gather support in the Senate.
NAHMA expects the next step in this process will establish a conference committee between both houses of Congress to resolve the differences between these two budgets. According to H.R. 325, the “No Budget, No Pay Act”, if legislators do not have a finalized budget by April 15th then their pay will be withheld until one is established.
