Senate Democrats released a budget resolution Wednesday for a 10-year fiscal vision that would trim the deficit and protect entitlement programs. It calls for more spending for roads and schools and for higher taxes on corporations and wealthy Americans to protect middle-class earners.
The budget — the first one Senate Democrats have produced since 2009 — stands in sharp contrast to the House Republicans’ plan released Tuesday that calls for cuts in corporate and individual taxes and aims to balance the budget in 10 years, fundamentally overhaul Medicare and eliminate President Obama’s health care law.
“The American people are going to have an opportunity to examine these budgets side by side,” said Senate Budget Committee Chairwoman Patty Murray, D-Wash. “They are going to be able to decide which approach is best for our economy, best for jobs and best for the middle class.”
The House and Senate are scheduled to vote on the competing budgets next week in their respective chambers. Both are likely to pass on party-line votes. “No question. We’ll pass the budget,” said Senate Majority Leader Harry Reid, D-Nev., this week.
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The two chambers are not likely to be able to reconcile their competing blueprints, but they serve as philosophical touchstones in the battles between the president and Congress on deficit reduction, federal spending, entitlements and increasing the debt ceiling.
The Democratic budget is not as far-reaching as the GOP budget because it does not call for any sweeping repeals, restructurings or overhauls of the federal government like those House Budget Committee Chairman Paul Ryan, R-Wis., has advocated for since Republicans took the House in 2010.
In particular, the GOP supports a full repeal of the 2010 health care law, a proposal to revamp Medicare for future retirees to a voucher-like system where seniors are given a federal subsidy to buy their own health care, and just two tax brackets at 10% and 25% for individuals.
Democrats reject all three of those proposals.
Instead, Murray’s blueprint calls for more modest initiatives for the nation’s fiscal health. They include:
- Fully replacing the sequester — $1.2 trillion in automatic spending cuts over 10 years that kicked in March 1 — with a 50/50 combination of spending cuts and new revenue.
- A $100 billion stimulus package directed at building the nation’s deteriorating roads and bridges, repairing public schools and paying for increased broadband access in schools.
- An additional $1.85 trillion in deficit reduction, which encompasses the plan to replace the sequester and adds it to the $2.4 trillion in deficit reduction achieved in the past two years for a total of $4.25 trillion in deficit reduction over 10 years.
- Reducing the deficit to below 3% of GDP by 2015 and keeping it below that level through the 10-year budget window.
- $975 billion in spending cuts, including $275 billion from health care programs Medicare and Medicaid, $240 billion from defense and $242 billion in estimated savings on interest payments.
- $975 billion in new revenue from closing tax loopholes and eliminating tax expenditures that benefit the wealthy. It does not call for raising individual tax rates.
“That is a responsible approach. It’s a balanced and fair approach. It’s the one endorsed by bipartisan groups and experts, and it’s the one supported by the vast majority of the American people,” Murray said Wednesday.
Republicans took issue with Democrats’ failure to balance the budget — which Ryan’s budget aims to achieve in 10 years. Democrats have countered that job and economic growth is a higher priority than deficit reduction.
“It is anything but balanced,” said Sen. Jeff Sessions, R-Ala., the senior Republican on the budget panel, “They’re using that phrase, but their plan absolutely never balances. Using those vague phrases allows them to avoid being held accountable.”
He said, “Is the Budget Committee of the United States Senate really prepared to say we cannot balance the federal budget? If that is so, it is a sad day in the history of America.”