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.

House Speaker Pelosi said that by the time the budget passes, they will have done more for health care than has been done in decades and more for education than in history.

General debate in the House is expected to begin Wednesday with a final vote likely Thursday.

Similar to last year, the House Progressive Caucus intends to offer an alternative budget, but Democratic aides said that, ultimately, Democrats will "rally around the president's budget."

Senate Republicans are expected to offer several amendments, including proposals to reduce spending rejected in committee markup last week. Sen. John Thune, R-S.D., said Monday he will offer an amendment that would require that any greenhouse gas cap-and-trade program -- an initiative Obama has called for and is allowed under the resolution -- would not result in increased gas or electricity prices. Sen. Mike Johanns, R-Neb., introduced an amendment that would bar the use of budget reconciliation to provide for a cap-and-trade program.

Some Democrats are likely to propose amendments to boost spending, Conrad said.

"Change this at your peril," Conrad warned Democrats. "We have carefully crafted this package to be able to win majority support. I think you'd better think very, very carefully about changing what we have brought to the floor. You might move it your direction, more spending only to wind up with a defeat on final passage of this budget."

On the use of budget reconciliation to get around a Senate filibuster for healthcare reform or other initiatives, Republicans and Conrad agreed it is a bad idea.

The Senate resolution does not include reconciliation instructions, but the House resolution does for healthcare reform and education legislation.

"I believe that any such effort would be a colossal mistake," said Sen. Arlen Specter, R-Pa., who added the move would amount to "a very strong blow against bipartisanship and cooperation."

Republicans used the approach to pass former President George W. Bush's tax cuts during his first term.

McCain said "I fully recognize that Republicans in the past have used reconciliation to further the party's agenda. It was wrong then. I wish it had not been done. I wish it would not be done now."

He added, "I think to address an issue as serious as healthcare reform in America and to put it in a budget resolution, I think would be a very serious breach of the customary way the Senate of the United States addresses these issues."

Conrad agreed and said he would oppose it in conference with the House because it would be difficult to write healthcare reform under the procedure.

"Am I likely to be able to prevail in the conference committee on this matter?" Conrad asked. "I don't know."

He cited the Senate parliamentarian as stating, "if you try to write major legislation in reconciliation, you will be left with Swiss cheese."