Democrats put their stamp on US budget
Congress's plans would require offsets for new spending and postpone renewing some Bush tax cuts.
from the April 2, 2007 edition
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Page 3 of 3
Budget watchdogs applaud Democrats
Budget watchdog groups applaud Democratic leaders for insisting on pay-as-you-go rules, but say they are putting off the tough budget decisions.
"The first tough decision they will have to make later this summer is with the AMT [Alternative Minimum Tax]," says Chris Edwards, director of tax policy for the CATO Institute.
House Democrats say they plan to find an offset for one year of AMT tax relief; Senate Democrats propose two years of relief. But neither has yet identified an offset to pay for it. "One-year relief is a $50 billion proposition, and I can't see Congress finding $50 billion in cuts," he adds.
Still, if Democrats can agree on a budget resolution this year, as expected, it will be an improvement over two of the past four years, when the GOP-controlled Congress failed to pass a budget.
"On the surface, these are very moderate budgets," says Richard Kogan, a budget analyst for the Center on Budget and Policy Priorities in Washington. In fact, if the trends in the Democratic budget plans continue, domestic discretionary spending would fall to its lowest level as a share of GDP in the past 50 years, he adds.
Since 1962, discretionary spending – all that isn't entitlement spending and interest on what is now nearly $9 trillion in national debt – has fallen from 68 percent to 38 percent of the federal budget.
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