Federal Budget Talks Focus On – What Else? – Taxes

By Ken Berry

At the very least, key members of the House and Senate are talking to each other about the federal budget. But talk – unlike the mounting debt of the country – is cheap.
More than a week ago, the Democrat-controlled Senate barely passed a budget featuring a $975 billion tax hike over a ten-year span, in addition to imposing state sales tax collections on online sales. Although other revenue-generating provisions weren't specified, presumably the nation's wealthiest taxpayers will shoulder most of the burden. The Senate-approved budget is a far cry from the House plan authored by Budget Committee Chair Paul Ryan (R-WI), where the Republicans rule the roost. Neither plan is expected to gain much traction.
Although the Senate budget isn't legally binding, it serves a litmus test for the future of the Marketplace Fairness Act requiring merchants selling products or services online to collect sales tax from their customers. Any business with less than $1 million in Internet sales would be exempt. This previously proposed legislation was added as an amendment to the budget resolution.
The House budget seeks to balance the budget in ten years by retaining $1 trillion in domestic spending cuts mandated by the sequester, cutting back most domestic programs, converting Medicare to a voucher-like program, and completely overhauling the tax code. It doesn't provide for any tax increases.
Not surprisingly, at this point the Senate and House are miles apart. Nevertheless, Senate Budget Committee Chair Patty Murray (D-WA), the main architect of the Senate version, expressed some optimism.
"I am proud of the work we did in the Budget Committee and on the Senate floor to write, debate, and pass a responsible budget plan that puts economic growth and the middle class first," Murray said in a prepared statement. "I want to especially thank the many people across the country who shared their stories, ideas, and priorities with us as we put this budget together. While it is clear that the policies, values, and priorities of the Senate Budget are very different than those articulated in the House Budget, I know the American people are expecting us to work together to end the gridlock and find common ground, and I plan to continue doing exactly that. I spoke with Chairman Ryan after his budget passed the House to congratulate him and continue our conversation about moving this process forward. I am confident that if Republicans join Democrats at the table and are truly ready to compromise, we can get to the balanced and bipartisan deal that the American people expect and deserve."
Senate Minority Leader Mitch McConnell (R-KY) was more pessimistic than Murray: "Although Senate Democrats finally generated a budget after four years, the plan they produced raises taxes, increases spending and debt and never, ever balances," he said. "Top Washington Democrats said they simply don't care about balancing the budget anymore, and it certainly shows in this tax and spend proposal. This budget is a rehash of the extreme policies that continue to hobble the economy and crush the middle class. The only good news is that the fiscal path the Democrats laid out in their budget resolution won't become law."
The next concrete move is up to President Obama. He's expected to unveil his own budget plan later this month. Depending on the administration's proposals, it could pave the way for a consensus or only lead to further stalemate.
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