Carper-Chafee-Feinstein will Offer Bipartisan Budget Plan Similar to “Blue Dog” House Proposal

Washington, DC – Senators Tom Carper (D-DE), Lincoln Chafee (R-RI) and Dianne Feinstein (D-CA) will introduce as an amendment a new, bipartisan budget, modeled on the “Blue Dog” proposal in the House. The Carper-Chafee-Feinstein plan would help restore fiscal discipline in the federal budget. “It is time to be reasonable, realistic, and fiscally responsible in our budgeting. The exorbitant tax cuts proposed in the budget currently before the Senate threaten the security of our nation and create skyrocketing deficits that will choke our nation’s ability to meet future challenges, both foreign and domestic, head-on,” Carper said. “We are at war, the nation’s first responders are enacting plans to protect our homeland, and our largest generation is preparing for retirement. Each of these events are inescapable at this point-and each of these events will have a serious impact on the fiscal health of our nation for decades to come. Failure to acknowledge and come to grips with these threats to our fiscal welfare is irresponsible.” “I am pleased to join with fellow centrists in offering a rational budget alternative,” Chafee said. “This is a budget hawk’s plan: it restrains spending and holds the line on tax cuts so that we can reestablish the fiscal discipline that was so hard-won in the 1990s. We all have our priorities, but in a time of war and enormous debt and growing deficits, it is not the time to push for long-favored tax cuts or rapid growth in spending. This is a time that demands sacrifice. This budget calls for it,” stated Chafee. This budget proposal provides a fiscally responsible approach to our economy,” Senator Feinstein said. “This is critical at a time when the nation is embarking upon a new war in Iraq, and the future of the economy remains unclear.” “Under this proposal, millions of Americans would receive immediate tax relief, but without increasing our long-term deficits. More importantly, this blueprint would bring the nation’s budget back into balance by 2009 – four year before the budget resolution being debated on the floor. This proposal is much more balanced than the one that was reported out of committee, and I urge my Senate colleagues to support it,” Feinstein said. Unlike the budget resolution currently before the Senate, the Carper-Chafee-Feinstein budget includes a reasonably sized stimulative tax cut that pays for itself, common sense spending limits, and enhanced budget enforcement mechanisms that will restore fiscal discipline in the Congressional budget process. This budget plan would put the budget on a path to unified balance by 2009, well before the House and Senate budget resolutions would. Moreover, this proposal balances the budget using much more sensible and realistic spending totals than those included in the House and Senate budgets. This proposal would enact an economic growth plan that would provide immediate tax relief for all taxpayers, particularly middle class families, and incentives for business growth. It adopts the aggregate spending levels in the President’s budget for discretionary and mandatory spending, but preserves flexibility for Congress to use these resources to meet emerging needs. The bill also calls for reinstatement of discretionary spending limits and “paygo” rules that expire this April. 1. Immediate tax relief within the context of long-term fiscal discipline This proposal assumes enactment of an economic growth plan that would provide immediate tax relief for all taxpayers, particularly middle class families, and incentives for business growth. This plan would: · Accelerate the next round of tax cuts in the 10 and 27 percent brackets to take effect retroactive to January 1, 2003 (instead of 2008); · Immediate marriage penalty relief; · Provide immediate and permanent estate tax relief; · Increase small business expensing from $25,000 to $75,000 for equipment purchased in 2003 and 2004 · Defer additional tax cuts in the 38.6 and 35 percent brackets if the budget remains in deficit because of the campaign in Iraq, the war on terrorism or other factors. 2. Addressing spending priorities within the context of fiscal discipline Carper-Chafee-Feinstein adopts the aggregate spending levels in the President’s budget for discretionary and mandatory spending, while preserving the flexibility of Congress to use these resources for different policies within the aggregate totals. · Prescription drugs. Provides $400 billion over ten years for a prescription drug benefit in Medicare targeted to seniors in greatest need, with additional resources available to provide a more generous benefit if the budget outlook improves · Discretionary spending. Adopts the President’s spending request of $786.6 billion in discretionary budget authority for fiscal year 2004 – $400.1 billion for defense and $386.5 for non-defense discretionary spending. The budget holds the growth of discretionary spending to the levels in the President’s budget over the next five years (the only years covered by the President’s budget). The budget adopts the Senate budget resolution’s discretionary defense spending numbers from 2009-2013. In doing so, this proposal allocates to non-defense discretionary spending the difference between the Senate Budget Committee and White House defense spending projections ($88 billion). This frees up $88 billion in 2009-2013 to pay for critical domestic programs. · Homeland security. Establish homeland security reserve fund that would allow spending of up to $10 billion above the discretionary caps in fy04 if the Secretary of Homeland Security submits a request after conducting a needs assessment. · Health and employment program. Creates a reserve fund equal to the $12.5 billion in increased spending proposed by the President over the next five years for Medicaid and employment programs. This fund could be used for legislation providing assistance to states and individuals for health and employment programs under current law. 3. Enforcing fiscal discipline · Directs the Finance Committee to report separate legislation increasing the debt limit by $150 billion. Restricts further increases in the debt limit, other than increases necessary to meet obligations of any military operation, to no more than $100 billion at a time until the CBO certifies that the budget on path to achieve unified balance by 2009. · Calls for reinstatement of discretionary spending limits and paygo rules that expire this April. · Prohibits spending or tax legislation that delays costs outside of the five year window. · Prohibits the use of “directed scorekeeping” in which legislation directs CBO to use certain assumptions to provide a more favorable budget estimate. · Adds a requirement that the Congressional Budget Office provide an estimate of the macro-economic effect of legislation increasing or reducing the budget deficit. Bottom Line: This proposal combines the spending restraint in the President’s budget with a more balanced and fiscally responsible economic plan and strong budget enforcement measures.