Senate Approves FY '04 Budget Resolution
The Senate on March 26 approved a fiscal year (FY) 2004 budget resolution (SConRes 23) that contains $852 billion for tax cuts, with $350 billion of that amount under reconciliation protection. The measure was approved by a vote of 56 to 44.
Republicans had threatened to offer amendments to reinstate all or part of the tax-cut reductions, but were apparently unable to muster the necessary votes and offered no controversial add-ons. Democrats, along with a handful of Republican moderates, earlier had managed to slash the president's tax cut from $726 billion to $350 billion. Before final passage of SConRes 23, the Senate did approve an amendment that would have an impact on tax-cut funds. By a 100-to-0 roll-call vote, members approved a proposal by Sen. Mary L. Landrieu, D-La., that would provide $10.5 billion over 10 years to meet unfunded needs of the National Guard and Reserves. It is offset by a reduction in the resolution's unreconciled tax cuts.
However, the real battle may lie in an upcoming budget resolution conference where the House and Senate must reconcile their respective budgets and produce a final product that will pass in both chambers.
"It's important to pass a budget, regardless of the size of the growth package," said Senate Budget Committee Chairman Don Nickles, R-Okla., who acknowledged that the Senate-approved budget was "not perfect." Nickles also stressed the importance of meeting the statutory deadline of April 15 to complete action on a federal budget; however, he conceded that the process would not be easy.
Senate Majority Leader Bill Frist, R-Tenn., was a bit more upbeat, telling reporters after the vote that he believes conferees will "come up with a growth package that will have a significant impact on the economy."
Sen. Olympia J. Snowe, R-Maine, a moderate and one of three Republicans to vote for the $350 billion cap, told reporters that, if budget conferees increase the tax cut over $350 billion, she would not rule out voting for it as long as it is near that figure. "I hope that the conference report will be more in line with what we think is realistic," she said.
In a speech at Baker and Hostetler's annual tax conference, Senate Finance Committee Chairman Charles E. Grassley, R-Iowa, told the audience that he believes the Finance Committee could still follow good tax policy with the compromise number of $350 billion. Grassley said that he will focus on accelerating cuts in tax rates applied to individuals, expanding the 10 percent tax bracket, reducing the marriage penalty and increasing the child care credit and small business expensing.