05-05-2001

BUDGET: Deal Reached on Budget Resolution

The conference agreement on the fiscal 2002 budget resolution reached by
House and Senate negotiators this week includes a bit less in tax cuts
than President Bush wanted and a bit more in spending. Bush and top
congressional Republicans-as well as some centrist Democrats-hailed the
deal, while Senate Minority Leader Thomas A. Daschle, D-S.D., and House
Minority Leader Richard A. Gephardt, D-Mo., criticized it. "It's an
agreement that makes a lot of sense," Bush said on May 2, noting that
the compromise includes "the largest tax cut in a generation"
and "reasonable levels of spending." Senate Budget Committee
Chairman Pete V. Domenici, R-N.M., added: "I think the President is
the big winner and the big leader on this." But at least one key Bush
ally, Sen. Phil Gramm, R-Texas, vowed to fight for tax cuts beyond the
level called for in the budget resolution. "I'm going to make it very
clear when we announce this budget that I don't consider myself bound
by" the tax number, Gramm said on May 1. "I'd be willing to bet
good money that when the year is over, we're going to give more tax cuts
than are reconciled." The budget resolution, which is nonbinding and
does not need the President's signature, is intended to set the framework
for the year's tax and spending decisions. The final agreement calls for
$1.35 trillion in tax cuts over 11 years, including $100 billion to
stimulate the economy in fiscal 2001 and 2002. This is less than the
President's $1.6 trillion tax-cut proposal, which the House had largely
adopted in its budget resolution, but more than the approximately $1.2
trillion the Senate agreed to in its budget resolution. On discretionary
spending, appropriators will have about $666 billion to ladle out in
fiscal 2002, 5 percent more than in the current fiscal year. The President
and the House had called for holding the spending increase to 4 percent,
while the Senate had sought an 8 percent hike. The budget deal also sets
aside $300 billion over 10 years for Medicare reform and a prescription
drug benefit, and $2 trillion over the decade to pay down the national
debt. On May 3, final votes on the budget resolution conference report
were delayed by two last-minute disputes concerning emergency spending and
health insurance for the uninsured. At press time, a House vote was
expected during the evening, with a Senate vote to follow.


Lisa Caruso/CongressDaily

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