April 22,2002

Grassley Questions Lack of Democratic Budget Vote


Last Monday was April 15th, that's the day Americans filed their income tax return with theIRS. April 15th was also the deadline for Congress to complete its work on the budget resolutionfor the federal government. But, the deadline has come and gone and we still don’t have a budget.It seems the Democratic leadership is reluctant to bring its proposed budget to the floor of the Senatefor a vote. According to recent press reports, the Democrats don’t know if they have the votes topass their budget.

What’s interesting about the Democratic leadership’s inability to find enough votes to passa budget is that the makeup of the Senate this year is exactly the same as last year. With this samemembership, Republicans last year produced a bipartisan budget supported by 65 senators, including15 Democrats. After taking a closer look at the Democrats’ budget, I’m not surprised they don’thave the votes. The Democratic budget is a case study in contradictions.

They claim to support the war on terrorism, but they don’t fund the President’s request fordefense. They say the President’s tax cut was too big, but they don't delay or repeal it. They claimto protect Social Security and Medicare, but they spend trust fund money on other programs for therest of the decade. In short, the Democratic budget says one thing and does another. Let’s take acloser look at these contradictions.

First, according to the Democratic Budget Committee Report, “the budget resolution providesall of the resources requested by the President for the Department of Defense for the next two years.It includes a reserve fund that will provide all of the defense funding requested by the President in2005 through 2012 if it becomes clear that the funds are needed.” In other words, the Democraticbudget funds the President’s request for two years and then cuts it by $160 billion the next eightyears.

Their so- called defense “reserve fund” is fraud. Unlike the other reserve funds in their budget-- for Medicare, health care, and the Individuals with Disabilities Act -- no money is actually beingset aside for defense. Admittedly, the war on terrorism may not cost as much as the President hasrequested, but instead of honestly setting aside the extra money until we know for sure, theDemocratic budget spends the money on other programs.

According to the Democratic Budget Committee Report, “The President’s budget doesrepresent an appropriate response to the September 11 attacks -- it provides the resources that willallow our armed forces, homeland security personnel, and citizens to respond to the challenge posedby terrorists. But -- just as last year -- the President’s budget does not respond adequately to theother major challenges facing this nation.”

In other words, the Democratic budget recognizes the potential need to fund the President’sdefense request, but insists other programs must come first. Compared to the President’s budget, theDemocratic budget spends $160 billion less on defense and $348 billion more on everything else.

The second contradiction in the Democratic budget is the issue of tax cuts. The DemocraticBudget Committee Report says, “Last year our national leaders were presented with a goldenopportunity to set this nation on a course to deal with the challenges facing it . . . But the Presidentand Republicans in Congress instead pushed through a plan that had only one priority -- tax cuts,. . . Because of the huge tax cut, there were not enough resources left to address other challenges.. . . The effects of this squandered opportunity are being felt this year.”

So, how does the Democratic budget propose to deal with this so-called squanderedopportunity? The Democratic Budget Committee Report states, “The budget resolution assumes norepeal or delay of tax rate reductions that are scheduled to occur in future years under the law enactedlast year.” So, if last year’s tax cut was such a “squandered opportunity,” why doesn’t theDemocratic budget do something about it?

The reason is simple. They know the American people are overtaxed. They know 12Democratic senators voted for the tax cut signed into law by President Bush last year. They knowtheir Senate colleagues will not vote to delay or repeal the tax cut. But instead of admitting thesefacts, the Democratic leadership continues its partisan attacks on Republicans for “squandering” thesurplus and “raiding” Social Security.

That brings us to the third and most outrageous contradiction of them all. The DemocraticBudget Committee Report states, “The budget resolution recognizes that it is crucial to return thebudget to balance without Social Security as soon as possible . . .” So, how does the Democraticbudget propose to do this? It contains a so-called “circuit breaker” that would create a budget pointof-order against the consideration of next year’s budget if it does not get to balance -- excludingSocial Security -- by 2008.

In other words, the Democrats, in their budget, believe it is so “crucial” to balance the budgetwithout Social Security that it proposes to wait until next year. Apparently, “as soon as possible”doesn’t apply to this year. During the Budget Committee markup the chairman explained that he wasnot requiring a plan to protect Social Security this year because the economy was still weak and thatit is unwise to engage in further deficit reduction during our recovery.

One might be tempted to accept this explanation. But, consider what the chairman had to saywhen OMB Director Mitch Daniels testified before the Budget Committee. The Budget Committeechairman stated, “I’d be quick to acknowledge I could live with [a deficit] in a year of economicdownturn and at a time of war. But you’re not forecasting economic downturn for even later thisyear -- you’re forecasting economic recovery. And for the rest of the decade, you’re forecastingrather strong economic growth and yet year after year you propose taking money from SocialSecurity, taking money from Medicare. . . How do you justify it?”

Blaming the economy for their failure to make any effort to protect Social Security isespecially ironic give the Budget Committee chairman’s view of how the economy works. Accordingto the Chairman, the tax cuts reduced the surplus thereby driving up long-term interest rates whichhave a negative impact on the economy. If one accepts the chairman’s view of the economy, thesooner Congress enacts a deficit reduction package, the sooner we can bring down long-term interestrates and stimulate the economy. But, instead of having the courage of his economic convictions, theDemocratic budget fails to make any effort to reduce the deficit. Instead, it just digs the hole deeper.The Democratic budget resolution dips into the Social Security trust fund and spends $1.3 trillionof the Social Security surplus on other programs.

What is even more ironic about the Democratic budget “circuit breaker” is that it only appliesto Social Security. Last year, the chairman of the Budget Committee insisted that it was equallyimportant to protect the Medicare trust fund as well.

Last year during the debate over the Social Security lockbox, the chairman stated, “Some ofus believe it is critically important that we protect both the Social Security trust fund and theMedicare trust fund so they are not used for other spending in the federal budget.” Apparently, thatwas then and this is now.

Now, the Democratic budget proposes to dip into the Medicare trust fund and spend $360billion of the Medicare surplus on other programs. The Democratic leadership would like theAmerican public to believe their opposition to tax cuts is based on their desire to protect SocialSecurity and Medicare. But, the budget they have produced this year shows that’s simply not true.Despite what the Democratic leadership might say, their opposition to tax cuts has nothing to do withprotecting Social Security and Medicare.

If they were so committed to protecting Social Security and Medicare, they could haveproposed to delay or repeal the tax cut. If they were so committed to protecting Social Security andMedicare, they could have proposed to reduce other spending. But, they chose to do none of theabove. Instead, the Democratic leadership chose to produce a budget that increases federal spendingand thereby spends $1.7 trillion of the Social Security and Medicare surplus on other programs.That’s the dirty little secret of the Democratic budget.

After spending all of last year and the first part of this year engaged in partisan attacks on aso-called Republican tax cut -- that passed with the votes of 12 Democrats -- the Democratic leadershave decided they would rather increase spending than protect Social Security and Medicare.Now, I believe we all know why the Democratic leaders don’t want to bring their budgetresolution to the floor of the Senate for a vote -- they are too embarrassed. I have to admit, I wouldbe embarrassed, too.