GOP Shapes Budget in the Senate

As a rebellion by fiscal conservatives broke out in the House, the Senate Budget Committee on Thursday passed a $2.6-trillion budget for fiscal 2006 that would allow the extension of many of the tax cuts enacted during President Bush’s first term.

The Senate budget puts the deficit at $362 billion -- $28 billion less than in Bush’s proposed budget and $14 billion less than the version the House Budget Committee completed Wednesday.

On amendment after amendment, Democrats on the Senate Budget Committee were unable to stop cuts in domestic programs proposed by Bush and by Sen. Judd Gregg (R-N.H.), the Senate Budget Committee chairman.

The action by the two budget committees shows that despite controversy, Bush’s proposed cuts in domestic programs and tax cuts still command broad support in the Republican-dominated Congress. In fact, the most serious challenge Thursday came not from Democrats but from conservative Republicans.

The Republican Study Committee, a group of about 90 conservatives, demanded a new procedure to keep individual spending bills from being budget-busters.

When they failed to persuade Rep. Jim Nussle (R-Iowa), chairman of the House Budget Committee, to accept such a provision, they promised to take their case to the full House when it debated the budget next week.

A spokesman for Nussle said the conservatives should propose their procedural change in separate legislation rather than in the budget resolution.

In the Senate, Republicans on the budget committee stood together, approving the bill on a 12-10 party-line vote.

The budget instructs the Senate Finance Committee to prepare legislation that would cut taxes by $15 billion in 2006 and $55 billion over the following four years. Bush proposed $312 million in tax cuts in 2006 but $106 billion over the following four years.

On the spending side, the Senate budget follows Bush’s recommendations category by category with the exception of Pell grants: It adds $1.3 billion to Bush’s request, enough to boost the maximum annual award next year to $4,150 for an additional 138,000 college students. The budget instructed seven Senate committees to cut spending in their areas by $4 billion in 2006 and $28 billion in the next four years.

Its instructions to the agriculture committee were designed to leave room for full funding of federal farm benefits. Bush has proposed trimming agricultural price-support programs.

Gregg, steering his first budget through the Senate as Budget Committee chairman, said he was satisfied with the result so far.

“This will be our first step toward fiscal discipline in a long time,” he said. “It’s not a major step forward, but it’s a step in the right direction.”

Sen. Kent Conrad of North Dakota, the committee’s ranking Democrat, dissented, arguing that the budget left the deficit lingering at around $600 billion a year. Conrad said it ignored the expected scaling back of the alternative minimum tax, the cost of the war in Iraq after 2006 and the cost of Bush’s proposal to divert some Social Security payroll taxes to private retirement accounts.

“The budget adds to the deficit at the worst possible time,” Conrad said, “just as the baby boomers retire” and drive up the cost of Social Security, Medicare and Medicaid.

As happened in the House Budget Committee, Democrats on the Senate committee proposed that all legislation to cut taxes or increase spending on federal benefit programs be accompanied by enough tax increases or spending cuts to prevent the budget deficit from growing.

But Gregg argued that such an approach discriminated against tax cuts because it left unscathed spending increases that resulted from higher costs of services and increases in the number of people eligible for benefits.

Democrats proposed eliminating Bush’s suggested Medicaid cuts, but Gregg responded that the cuts amounted to reducing estimated spending growth over the next five years from 41% to 39%.

“If we can’t do that,” committee member Sen. Lamar Alexander (R-Tenn.) said, “we can’t do anything.”

In one of many 12-10 votes, the Republicans prevailed.