Senate Rejects Bush’s Cuts

The Senate on Thursday voted to restore cuts sought by President Bush in Medicaid, education and other domestic programs, and then approved a $2.6-trillion budget for fiscal year 2006.

The vote on the budget was 51-49.

The Senate’s actions set up a confrontation with the House, which earlier Thursday approved its own version of the budget -- one that hews more closely to Bush’s initial spending and tax proposals.

They also shone a spotlight on fissures in the Senate’s GOP majority. Four Republicans broke ranks with their party to vote against the overall bill; seven voted to restore funds for Medicaid but to study ways to save money in the future.

“This is not a vote against fiscal responsibility,” said Sen. Gordon H. Smith of Oregon, a moderate Republican and the Medicaid amendment’s principal author. “This is a vote for cutting the deficit in an orderly way.... We’re letting the budget drive the policy, instead of the policy driving the budget.”

As votes continued late into the night on one challenge after another to the Senate Budget Committee’s proposal, Sen. Judd Gregg (R-N.H.), the committee chairman, admitted that the effort to control the deficit -- which reached $412 billion last year -- was under “serious stress.”

“A lot of what’s happening is turning a cute little bunny rabbit into a camel,” Gregg said as the parade of successful amendments proceeded. Among them was one that would roll back the maximum amount of Social Security benefits subject to income tax for wealthier seniors.

The budget sets the basic outlines of tax and spending targets as legislation to fund the government moves through Congress, and Gregg said he hoped that the version ultimately negotiated with the House would be more restrained than what the Senate approved.

If the two chambers cannot reach agreement, they would be forced to go without a plan, as they did last year.

A budget breakdown would be an embarrassment for the GOP leadership, which had expected that the larger Republican majorities in both chambers -- and particularly in the Senate -- would allow easy passage of the president’s proposals.

It also could doom a top energy priority: allowing oil drilling in the Arctic National Wildlife Refuge. A measure smoothing the way for drilling legislation is included in the Senate’s version of the budget and is considered likely to emerge intact from a compromise with the House.

The absence of a budget would also short-circuit the House and Senate budget committees’ plans to instruct other congressional committees to write legislation cutting farm benefits, food stamps and other programs.

Under congressional rules, approval of a budget resolution by both chambers would protect such legislation from filibusters in the Senate. As a result, spending cuts could be approved by a simple majority of 51 senators.

Robert L. Bixby, executive director of the Concord Coalition, which lobbies for balanced budgets, warned that the amendments festooned to the Senate bill had increased the chances that Congress would not be able to settle on a budget at all.

“It’s a classic case of good politics making bad fiscal policy,” Bixby said.

Bixby said Thursday’s spending and tax votes in the Senate showed how hard it was even for a Republican Congress to make minor deficit reductions. Problems are particularly likely, he said, when Congress tries to cut some of the big benefit programs (in this case, Medicaid for the poor), but not the others (Social Security and Medicare for the elderly).

“It’s hard to defend cutting taxes for the rich and paying for it with benefit cuts for the most vulnerable people,” he said.

During the Senate debate, Smith said the cut contemplated by the Budget Committee was a matter of life or death to some of Medicaid’s 52 million low-income beneficiaries.

“Those 52 million people are counting on us to do this right,” he said, “not just to do it fast.”

But Gregg, the Budget Committee chairman, called Smith’s life-or-death claim a “gross exaggeration.” He said the Senate lacked the courage to make even a minuscule reduction in a popular program.

The $14 billion, Gregg said, is barely more than 1% of the $1.12 trillion that the program would otherwise cost over the next five years. Without the cut, he said, Medicaid spending is projected to grow by 41% in that period; with it, spending growth would still be 39%.

The education funding was restored on a motion by Sen. Edward M. Kennedy (D-Mass.). Even Democrats were surprised that Kennedy’s amendment prevailed on a vote of 51 to 49, with six Republicans breaking ranks.

The six were Lincoln Chafee of Rhode Island, Susan Collins and Olympia J. Snowe of Maine, Norm Coleman of Minnesota, Mike DeWine of Ohio and Arlen Specter of Pennsylvania. The same six Republicans plus Smith sided with the majority on the Medicaid vote.

All Democratic senators, including Barbara Boxer and Dianne Feinstein of California, voted with the majority on Medicaid and education.

The income tax break for Social Security benefits was a Republican initiative sponsored by Jim Bunning of Kentucky.

Five Democrats -- Robert C. Byrd of West Virginia, Mary L. Landrieu of Louisiana, Bill Nelson of Florida, Ben Nelson of Nebraska and Ken Salazar of Colorado -- voted for the tax rollback, and a like number of Republicans -- Chafee, Snowe, Pete V. Domenici of New Mexico, Ted Stevens of Alaska and George V. Voinovich of Ohio -- voted against it.

The vote turned the committee-approved $70 billion of tax cuts into $134 billion. It would roll back a provision of President Clinton’s first-year program to bring the deficit under control. The measure subjected up to 85% of the Social Security benefits of the highest-income seniors to income taxes, up from the 50% that was then law.

On the final vote, Republicans Chafee, Snowe, DeWine and Voinovich joined the Democrats in opposition.

While the Senate made its way through dozens of amendments, the House expeditiously passed its version of the budget by a largely party-line vote of 218 to 214, with the California delegation voting along party lines.

The two versions of the budget allow further tax cuts and trim both kinds of spending: “discretionary” outlays that occur as a result of annual spending bills and “mandatory” outlays in programs that entitle people or groups to federal money if they meet certain qualifications -- Social Security for the elderly, for example.

Without specifying them, the House budget makes room for $106 billion in tax cuts over five years. The Senate budget, thanks to the Social Security amendment, leaves room for $134 billion in tax cuts.

The House and Senate versions assumed that domestic discretionary spending as a whole would be frozen next year at this year’s level, although some programs could go up if others went down. The Senate went on record as opposing Bush’s plan to abolish community development block grants.

It was on mandatory programs that the House and Senate budgets differed most. The House budget would instruct nine House committees with jurisdiction over benefit programs to prepare legislation trimming a total of $69 billion in spending that would otherwise occur over the next five years. The Senate budget, with the prospective Medicaid cuts stripped out, would order six committees to cut $18 billion.

The contributions of multiple House and Senate committees would be packaged into a single “reconciliation” bill -- so-called because it reconciles individual tax and spending bills with the budget’s totals.

The differences between the House and Senate budgets will have to be worked out by a House-Senate conference committee. Although Republicans favoring Medicaid and education cuts will dominate the committee, dissident Republicans said they expected their triumphs on the Senate floor to be reflected in the compromise bill that eventually emerges -- if one does.

Smith said he expected the conference committee to approve a Medicaid cut, but in an amount less than the $14 billion that the Budget Committee had proposed or the $20 billion in the House-passed budget.

The budget that Congress ultimately passes -- if it can agree on one -- will not need President Bush’s signature and will not have the force of law. It merely sets the outlines for spending and tax legislation that Congress will pass later in the year.