Senate Budget Committee chairman Patty Murray, D-Wash., on Wednesday unveiled a fiscal 2014 budget resolution that would reduce the deficit $975 billion over 10 years by “closing loopholes and eliminating wasteful spending in the federal tax code that benefits the wealthiest Americans and biggest corporations.”
The budget proposal, which does not contain many details, also includes a $100 billion targeted jobs and infrastructure package that would fully paid for by the tax reforms. The text of the budget legislation refers to the possible financing of infrastructure projects with tax-credit bonds.
The Democrats’ budget is clearly the antithesis of the one announced by House Budget Committee chairman Paul Ryan, R-Wis., on Tuesday. The Senate Budget Committee Democrats would replace the current across-the-board cuts to federal spending with “smart, balanced, and responsible deficit reduction,” according to a release.
The Republican budget would continue the sequester through the fiscal year, which ends on Sept. 30, and focuses on spending cuts without any proposals for raising tax revenues beyond those already adopted by Congress.
Murray said her budget builds on the $2.4 trillion of deficit reduction already put in place and would add an additional $1.85 trillion in new deficit reduction for a total of $4.25 trillion — more than the $4 trillion reduction called for by the Simpson-Bowles Commission report, a shorthand name for the National Commission on Fiscal Responsibility and Reform created by President Obama in 2010.
That commission released a report in December 2010 that recommended approximately $4 trillion in deficit reduction over ten years from a balanced combination of spending cuts and new revenue. The report recommended barring tax exemption for all new municipal bonds. Murray seems to be leaving details of tax reforms up to the Senate Finance Committee.
Murray says that, in addition to obtaining $975 billion from tax law changes, the Democrats’ proposal would obtain another $975 billion from spending cuts. They would include: $493 billion from domestic programs, including $275 billion in health care savings “made in a way that does not harm seniors or families;” $240 billion from cuts in defense spending from the drawdown of troops overseas; and $242 billion in reduced interest payments.
The Senate Budget Committee held a hearing on the proposal on Wednesday and plans to vote on the proposal and amendments to it on Thursday.
The House and Senate must approve their budget resolutions and negotiate a compromise one. Budget resolutions give reconciliation instructions to committees to produce legislation that would achieve a certain amount of savings.
Reconciliation allows Congress to give expedited consideration to bills enacting spending, revenue, and debt policies contained in the budget resolution.