Monday, March 25, 2013

US Senate approves first Budget since 2009

Mar 24, 2013
But showdown looms as GOP-led House adopts its own fiscal plan

Washington - The US Senate reached a milestone early yesterday when it overcame partisan gridlock to approve its first Budget resolution in four years, setting up a political duel with the Republican-held House.

The sweeping plan for fiscal year 2014, the first fiscal blueprint passed by the Democrat-led Senate under President Barack Obama since 2009, squeaked through by the narrowest of margins, 50-49.

"Doing this has been a Herculean feat," said Democratic Majority Leader Harry Reid, noting the 100 amendments that were voted on in a marathon, 13- hour session.

The plan, shepherded by Senate Budget Committee chair Patty Murray, aims to reduce deficits by US$1.85 trillion (S$2.3 trillion) over 10 years mostly through the closure of tax loopholes that favour the rich and an equal amount in government spending reductions.

The House of Representatives last Thursday adopted the Republican plan from House Budget Committee chairman Paul Ryan, which seeks US$4.6 trillion in savings over the same period without raising new taxes. It aims to reach a small surplus by 2023 through deep cuts to health-care and social programmes.

Neither of the non-binding plans has a chance of passage in the opposing chamber, leaving Congress no closer to resolving deep differences over how to shrink deficits and grow the economy. But they give each party a platform from which to tout their own fiscal visions.

Passage of a stop-gap government funding measure last Thursday lowered the temperature in the Budget debate by eliminating the threat of a government shutdown this week.

The Senate had not passed a Budget resolution since 2009 because of fiscal policy disputes with House Republicans that forced Congress to turn to numerous stop-gap spending measures to avoid government shutdowns.

But this year, under last month's debt limit increase law, members of both the House and Senate faced pay suspensions if their chamber failed to pass a budget by April 15.

Mrs Murray said after the vote that she would try to work with Mr Ryan on a path towards compromise but observers say there is little chance the two sides can work out differences between the two budgets.

"You would expect that if there were a chance of success, they wouldn't have planted flags on completely different planets," said Mr Sean West, US policy director at Eurasia Group, a political risk consultancy.

Ultimately, it may take another 11th-hour deal between Mr Obama and congressional Republicans to set a fiscal path forward as part of a deal to raise the debt ceiling, he said.

The US Treasury is expected to exhaust its borrowing capacity around late July or early August.

Reuters, AFP

[This report does not mean what you think it means.

No. The US still does not have a budget. The US Congress has not signed a budget into law since 1997.

This report is just telling us that the US Senate (upper house) has pass a non-binding budget resolution by simple majority. But it is only binding if the House concurs (with a similar resolution, or if the Senate passes a second resolution. So they are still in gridlock.]

No comments: