March 30, 2012

Fiscal Year 2013 Budget

I wrote last week about Budget Committee Chairman Paul Ryan’s budget resolution for FY 2013. This week the House took votes on several budget proposals, including Rep. Ryan’s. His proposal goes well beyond what was agreed to in the Budget Control Act (BCA), which already significantly reduced spending. Over ten years, his budget reduces non-defense spending by more than $1 trillion, on top of the reductions made by the BCA. Under this budget, Defense Department funding would increase next year.

Just like last year, this budget dismantles the existing Medicare program and replaces it with a voucher program. It targets Medicaid by cutting $810 billion in funding over ten years and turning it into a block grant program. The budget reduces funding for higher education, transportation, research and development.

Despite the fact that our federal deficit is enormous, this budget reduces the top tax rate for corporations and individuals from 35% to 25%, and it makes the Bush tax cuts permanent. The Tax Policy Center estimates that this budget would give those earning more than $1 million a year an average tax cut of more than $125,000. We simply cannot reduce the deficit by spending cuts alone. We must have a balanced approach and this budget resolution could not be further from balanced. I voted NO. The Ryan budget passed and the entire vote is recorded below:

Before the Ryan budget passed, the House voted on some alternative proposals. The Republican Study Committee (RSC) budget was even more extreme than Rep. Ryan’s. This budget caps federal discretionary spending at $931 billion, which is almost $100 billion less than the Ryan budget. It completely eliminates many important programs and makes deep cuts to programs such as Medicaid and the Children’s Health Insurance Program. The RSC budget also requires House Committees to find nearly another $500 billion in programming cuts by the end of April, putting programs like Medicare and Pell Grants at risk of deep cuts. Finally, the RSC budget proposes tax reform that could raise taxes on people making less than $17,000 a year by raising the lowest income tax bracket from 10% to 15%. The highest earners would pay less in taxes under this budget because the top tax bracket would be lowered from 35% to 25%. I voted NO. The proposal failed and the entire vote is recorded below:

The Democratic Caucus also proposed a budget and it takes a much more balanced approach toward deficit reduction. It recognizes the need to make tough choices about federal spending but protects the social safety net and makes fair reforms to the tax code. In the short term, significant investments are made to create jobs and support economic recovery. It establishes a reserve fund for job creation programs including $50 billion for surface transportation projects, $80 billion for education jobs and school construction, $5 billion so states can hire police officers and firefighters, and $1 billion to create a Veterans Jobs Corps. This budget maintains the tough spending caps that were agreed to in last year’s Budget Control Act, saving over $1.2 trillion over the next 10 years. It caps federal spending on the wars in Iraq and Afghanistan, reduces duplicate federal programs that have been identified by the Government Accountability Office and makes reforms to Agriculture subsidies. Finally, this budget establishes close to $1 trillion in new revenues by letting the Bush tax cuts for the highest earners expire and closing numerous corporate tax loopholes. I voted YES. The proposal failed and the entire vote is recorded below:

The Congressional Progressive Caucus, of which I am a member, also offered an alternative budget proposal. This budget achieves $6.8 trillion in debt reduction over 10 years. It protects Social Security and Medicare and provides substantial investments that will create jobs. It sets FY13 discretionary spending levels at $1.198 trillion. Defense spending is cut by $749 billion over the next 10 years and spending on the wars in Iraq and Afghanistan ends starting in FY14. Social Security is also strengthened because this proposal eliminates the cap on earnings subject to the payroll tax for both employers and employees. Currently all income over $110,100 a year is not subject to a Social Security tax.

This proposal also raises substantial new revenues by making changes to the tax code. It allows the Bush tax cuts for the top 2% of wage earners to expire on schedule at the end of 2012. It establishes a new higher tax brackets for those earning over $1 million per year and ends some tax loopholes that benefit the wealthy and large corporations.

While I may not agree with everything in the Progressive Caucus budget, the proposal shows that it is possible to get our fiscal house in order without making draconian cuts to the social safety net. I voted YES. The proposal failed and the entire vote is recorded below:

The Congressional Black Caucus also offered a budget proposal. It cuts $3.4 trillion from the deficit while maintaining the social safety net and making investments in the economy.

The CBC budget allows the Bush tax cuts to expire for the top 2% and extends them for everyone else. The budget fully offsets the nearly $3 trillion cost of extending these tax cuts in a number of ways, including taxing capital gains as ordinary income and closing corporate tax loopholes. The budget proposal also reverses some of the cuts contained in last year’s Budget Control Act while making investments in education, housing, veterans, science and research and infrastructure over the next 10 years. I voted YES. The proposal failed and the entire vote is recorded below:

Transportation Reauthorization

Yesterday the House passed H.R. 4281: a three month extension of the transportation reauthorization bill, which was set to expire at midnight Saturday. You may recall that an extremely flawed bill passed in the House Transportation Committee about six weeks ago. I oppose it, and many other Members on both sides of the aisle also oppose it. Since committee passage, the bill has gone nowhere because Republican leadership doesn’t have the votes for it. Efforts to revise that bill have also gone nowhere. Meanwhile the Senate passed its own transportation bill with an overwhelming and bipartisan vote but House leadership won’t bring that bill up for a vote either. So another extension has become necessary. I voted NO because the House can’t keep delaying action on transportation. Jobs are at stake as well as millions of dollars in funding for states to address their infrastructure needs. States and local entities need long-term certainty when it comes to transportation funding and another extension won’t give them that. H.R. 4281 passed and the entire vote is recorded below:

Jumpstart our Business Startups Act

This week the House passed an amended version of H.R. 3606: the Jumpstart our Business Startups Act. H.R. 3606 essentially seeks to increase access to capital for small businesses. It does this by making changes to existing Securities and Exchange Commission (SEC) rules regarding the way that small businesses can raise money from investors. H.R. 3606 reduces many SEC reporting and registration requirements. I voted against H.R. 3606 when it passed the House a couple weeks ago and the changes that the Senate made did not go far enough for me. My chief concern is the loosening of SEC rules without fully reviewing the consequences of doing so. I am concerned about the bill’s exemptions to many current regulations and consumer protections. For example, H.R. 3606 would allow companies with up to $1 billion in annual revenues to be temporarily exempt from mandatory shareholders’ say-on-pay votes, independent auditing of their internal controls and other regulations. The bill also defines a small business as one with revenue below $1 billion. Under this definition, Dunkin Donuts and Spirit Airlines would be considered small businesses which clearly they are not. I voted NO. H.R. 3606 passed and the entire vote is recorded below:

What’s Up Next Week

A two week District Work period has been scheduled. Next votes will occur on Monday, April 16th.