Senate Begins Debate As JCT Scores Obama Tax Proposals

With 50 hours of debate to kill, partisan saber-rattling began Monday on the FY10 budget resolution as the Senate kicked off debate on the measure.


Sen. John McCain, R-Ariz., railed against the resolution, which includes top policy initiatives, such as healthcare reform, proposed by President Obama in his FY10 budget proposal.


"Like the president's plan, the measure amounts -- in all candor -- to generational theft," McCain said. "It ... raises at least $361 billion in taxes and borrows $1.1 trillion more than what we expect to borrow under current law."


Budget Chairman Kent Conrad said "I am really quite proud of what this budget has accomplished in the five years of its term."


He underscored that the resolution reduces the deficit over the five years, despite the need to run high deficits in the first two years to stimulate the economy, and added that the resolution drops the deficit from 12.2 percent of gross domestic product in FY09 to less than 3 percent in FY14.


Nondefense discretionary spending would be 4.7 percent of GDP in FY10 and sinks to 3.6 percent of GDP in FY14.


"I absolutely reject the notion that the budget resolution is misleading or employs gimmicks in any way," Conrad said.


Meanwhile, the Joint Committee on Taxation Monday released an estimate of Obama's tax proposals showing a net tax cut of $3 trillion over the next decade.


That does not count revenues from climate change and international tax reform proposals that have not been fleshed out, which Obama's budget office initially scored as raising $856 billion in combined revenues. If those revenues were factored in, it would still show a net tax cut of more than $2.1 trillion using congressional scorekeeping rules.


Most of the revenue projections track roughly with Obama's budget estimates, with some minor exceptions. For example JCT scored a series of tax increases on the oil and gas industry as raising $26.7 billion, as opposed to $31.5 billion.


A bigger hit comes from repeal of the "last-in, first-out" accounting method, which JCT scored as a $79.5 billion tax increase, rather than $61.1 billion in Obama's budget. Numerous industries back the existing LIFO accounting method, from auto dealerships to whiskey distilleries.


The Senate will begin voting on amendments today with the bulk of the "vote-a-rama" -- the annual chaotic series of votes on an unlimited number of amendments permitted on the budget resolution -- expected Thursday, leadership aides said.


"It's gonna be just a ridiculously heavy day," said one GOP leadership aide. A final Senate vote is expected by Friday.


With only a majority needed to advance the resolution, Republicans concede they have little chance to block it. House and Senate Republicans are nevertheless culminating weeks of criticism of the Democrats' spending plans with a coordinated rhetorical attack. And they hope to deny either the House or the Senate resolutions a single GOP vote.


As voting speeds up Wednesday, the full House and Senate Republican conferences will hold a rare joint meeting on the House floor, in what aides call an effort to rally opposition. "It's just a show of Republican unity," a Senate GOP leadership spokesman said.


Obama met with House Democratic leaders Monday, where he made his case to pass the budget "powerfully and persuasively" and that it's "part and parcel" of his plan for the nation's economic recovery, said House Majority Leader Hoyer.

Presented by

Cyra Master

Cyra Master is a W.E.B. Du Bois fellow at the Atlantic. Previously, she was an editor at the nonprofit Center for Law and Social Policy and was a reporter for the New Hampshire Eagle Tribune. She is a graduate of Emerson College.

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