Congressional Closeup
by Carl Osgood
House, Senate Heading Towards Clash on Spending, Tax Cuts
The House and Senate each made apparent progress on budget reconciliation, before Congress left town for the Thanksgiving break, but the two chambers remain far apart on spending cuts and tax cuts. The Senate voted, 64 to 33, on Nov. 17, to pass its reconciliation tax bill, which provides for about $60 billion in tax cuts over the next five years. The bill, however, excludes extension of the cuts in dividends and capital-gains taxes passed in 2001, which expire in 2008. Senate Finance Committee chairman Charles Grassley (R-Iowa) had sought a two-year extension but could not get the bill out of his committee with that provision because of the opposition of Sen. Olympia Snowe (R-Maine). The House acted several hours later, at about 1:30 a.m., in fact, to pass its budget-cut bill by a vote of 217 to 215. The House bill reduces spending in mandatory programs by about $50 billion, including $11 billion from Medicaid, but the Republican leadership was only able to bring it to the floor after weeks of wrangling within the GOP caucus and, in the end, making promises to Republican moderates to ameliorate some of the worst provisions, such as the $700 million cut in the food-stamp program.
If the Republicans succeed in their aims, they will have passed a budget bill that reduces mandatory spending by somewhere between $35 billionthe amount of the Senate-passed billand $50 billion and a tax-cut bill of about $70 billion. Whether either bill can become law remains to be seen, however, because of the substantial differences between the House and Senate versions. In any case, Democrats have pointed out that the net effect of the two bills together is to increase the deficit by at least $20 billion over the next five years, making a mockery of the neo-conservatives' claims that the spending cuts are needed to pay for the $60 billion in appropriations to pay for relief efforts in the aftermath of Hurricanes Katrina and Rita. The neo-cons' rhetoric has not applied to the more than $250 billion Congress has appropriated to pay for the war in Iraq. None of that money has been offset by spending cuts elsewhere in the budget.
Senator Robert Byrd (D-WVa) subjected the entire budget process to blistering criticism, during the Senate debate on the tax bill. Byrd warned that what has happened over the years since the passage of the 1974 Congressional Budget Act is that the Congress has ceded more and more of its constitutional power over the purse to the Executive branch. "The budget process increasingly serves as a means to circumvent the role of the Senate to deliberate, and, lately, it has been used in a way that has fostered an unprecedented and unbroken string of deficits and debt," he said. He noted that, in recent years, Senate amendments to reconciliation bills have been taken up in what are known as "vote-a-ramas," where amendments are considered for two minutes, then voted on, in rapid succession. "We cannot claim to serve the interests of our constituents if we don't have time even to read the amendments on which we are casting our votes," he said. He warned that the process as it now functions damages the Senate "severely" and "weakens the Senate as an institution and does a great disservice to the American people."
House Republicans Lose Spending Bill Vote
Republicans got their heads handed to them on the Labor/Health and Human Services/Education spending bill, which was defeated on a 224 to 209 vote, on Nov. 17. The bill, as passed by the Senate, included $8 billion in emergency spending for preparation for a possible avian flu epidemic, but that money was stripped out in conference with the House, on the insistence of conservative Republicans who opposed any such spending unless it is offset by cuts elsewhere in the budget. Rep. Ralph Regula (R-Ohio), the chairman of the Labor/Health and Human Services/Education Departments appropriations subcommittee, told the House that the avian flu provision is such a big ticket item that, "There's no way to offset $7 billion or $8 billion." The bill included $63.4 billion for the Department of Health and Human Services, almost $1 billion less than last year.
Democrats opposed the bill because of the reduced spending levels, which hit most of the social programs in the bill. "This is the day when the price of Republican tax cuts for the wealthy becomes quite clear," said Rep. David Obey (D-Wisc), the ranking Democrat on the House appropriations committee. He noted that the bill cuts $437 million out of job training and employment services programs, even though there are 7.5 million Americans out of work. He also reported that the bill cuts rural health-care programs, low-income home assistance, and many other such programs, even though the need for them is growing. The bill is now likely to wind up as part of a year-end omnibus appropriations bill, something that House appropriations committee chairman Jerry Lewis (R-Calif) had vowed, at the beginning of the year would not happen.
Just before taking up the Labor/HHS bill, the House approved another continuing resolution, this one to keep the government open until Dec. 17, while Congress tries to wrap up the remaining spending bills. As of Nov. 18, only five of the 12 bills had been signed into law. Obey blamed the situation on the Republican-authored fiscal 2006 budget resolution, passed last spring, which was "so skewed in favor of the ideological right within the majority party caucus that, in the end, even a number of Republican moderates have not wanted to vote for some of these bills."
Filibuster Threat Stalls Patriot Act Reauthorization
House and Senate leaders backed off from a planned quick vote on reauthorization of the Patriot Act, on Nov. 18, when a bipartisan group of Senators threatened to use every procedural device available to them if a conference agreement on the bill did not substantially agree with the Senate version of the bill. The key provisions at issue include the so-called "library" provision, which allows the FBI to seize business records without a warrant, and the ability to use "roving wiretaps," on suspects. Both provisions have four-year sunsets in the Senate bill, but the House provided for ten-year sunsets. Opponents of the ten-year sunsets argue that four-year sunsets make the Department of Justice far more responsive to Congressional oversight than would otherwise be the case.
The bipartisan grouping, which includes Sens. Russell Feingold (D-Wisc), John Sununu (R-NH), Richard Durbin (D-Ill), Larry Craig (R-Idaho), Lisa Murkowski (R-Alaska) and Ken Salazar (D-Colo) complained, at a Nov. 18 press conference, that the GOP leadership was trying to ram the conference report through both Houses in time to go home for Thanksgiving, without giving members of either House time to fully digest the contents of the bill. They also expressed support for the Senate provisions. "We hope that the leaders on both sides of the Rotunda will come to realize that they have a strong bipartisan coalition for meaningful Patriot Act reform," said Durbin. "If they do not, and there are test votes, I believe we can demonstrate on the floor of the United States Senate that a substantial bipartisan majority opposes this Patriot Act as it's been currently proposed."
That threat was apparently enough to make Senate Judiciary Committee chairman Arlen Specter (R-Pa) back down. Specter himself expressed support for the four-year sunsets, and could not understand why House negotiators were proposing ten years, even though the House had passed a motion, by voice vote on Nov. 9, instructing House conferees to agree to the four-year sunsets. "My view is," Specter said, "that there ought to be a four-year sunset so we can review it again in a reasonably timely fashion." Later, Specter reported that under conditions of a filibuster threat, he and House Judiciary Committee chairman James Sensenbrenner (R-Wisc) had agreed to put off consideration of the conference report until December. He also indicated, however, that, in spite of the filibuster threat, he would sign the conference report at a certain point, even if the House negotiators don't back down on the sunset provision.
White House Threatens Veto of Senate-Passed Pension Bill
Labor Secretary Elaine Chow emphasized, in an MSNBC-TV interview Nov. 18, that the White House intends to veto the "pension reform" bill passed Nov. 16 by the Senate, 97-2, unless the Republican leadership blocks it in the House. The bill, sponsored by Sens. Mike Enzi (R-Oregon) and Edward M. Kennedy (D-Mass) of the Health, Education, Labor, and Pensions Committee, was the least draconian of the various versions of the original White House "reform"; but all these versions would, according to analyses by the Congressional Budget Office, increase the rate at which companies are abandoning their pension plans.
This bill would give underfunded companies seven years to catch up to 100% funding of their plansmuch too long, according to Chao. It would increase the premiums the companies pay PBGC from $19 to $30 per worker, per year. Senators Debbie Stabenow and Carl Levin, both Democrats of Michigan, voted no because of additional penalty premiums and faster "catch-up contributions" required of companies with low credit ratings. The Senate bill allows airlines, only, 20 years to catch up on their funding; and allows pilots, who must retire at 60, to collect full pensions at that age.
Of note, the bill contains a key bankruptcy rule change, brought over from the House Ways and Means Committee, which imposes a "fine" of $1,250 per worker, per year, on any company which tries to emerge from bankruptcy having dumped its pension plan. In the Delphi case, for example, this "fine," paid to the Pension Benefit Guaranty Corporation, would be $30 million a year, or about one-third of Delphi's currently scheduled annual pension contributions (which it has suspended).
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