In budget wrangling, cost of doing nothing grows
At stake are competing visions of how to restore fiscal stability and ward off a recession.
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Democrats say that are not raising taxes, simply letting some of the tax cuts expire. Senate Democrats propose extending the Bush tax cuts that mainly benefit the middle class, such as marriage-penalty relief, the child tax credit, and the 10 percent income-tax bracket.Skip to next paragraph
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"When we set out to do this budget, our overriding objective was to balance it, because we are appalled at the mountain of debt being left our children – and at our stature in the world as the greatest debtor nation," Mr. Spratt said.
But at the same time, he added, the nation needs to balance its priorities, so Democrats in both the House and Senate are also proposing increases in spending for education and children's healthcare as well as investments to make the US more competitive in the global economy.
An area of rare agreement in the budget debate is war spending.
Both the House and Senate budget panels propose fully funding President Bush's request for defense spending, which projects that war costs in Iraq and Afghanistan will drop to $70 billion in 2009, then zero out.
With war costs running at $193 billion in 2008, that's an unrealistic estimate, but Democrats are in no mood to increase it. "That number [$70 billion] fits the policy of most Democrats more than it fits the policy of the president, said Senate Budget Chairman Kent Conrad (D) of North Dakota at a breakfast meeting with reporters on Wednesday.
"Can you imagine the message it sends for Democrats, who want to get out of Iraq, to propose spending more than the president?" he added. "I could not pass a budget like that."
In January, Budget Committee chairs Spratt and Conrad called on the White House to send Congress a realistic budget.
"From a political standpoint, the stars aren't aligned to be able to make any significant progress in the short term," says US Comptroller General David Walker. "It is, however, critically important that the next Congress and the next president make fiscal responsibility and intergenerational equity [among] their top priorities."
"The US has five to 10 years to demonstrate to foreign lenders that "we're going to get serious about our fiscal future," he adds. "If we do, we can turn things around and make sure that our future is better than our past. If we don't, we'll be facing much more serious economic challenges and hardship that most Americans have ever seen in their lives."
The federal government's total liabilities and unfunded commitments for future payments related to Social Security and Medicare have increased to $53 trillion, up from $20 trillion, when President Bush took office, Walker says.
Republican on the Budget Committee, last September proposed a bipartisan task force to tackle the nation's long-term fiscal challenges, including the surging debt and retirement of the baby boomers.
But lawmakers do not see the current political climate as supporting such a bipartisan effort.
"Even if Congress comes up with a budget this year, the chances of its actually being implemented are relatively small," says Stan Collender, a longtime federal budget analyst.