Sunday, March 24, 2013

Senate Passes Budget, Calls For Nearly $1 Trillion In Tax Increases

3/23/2013 @ 10:59PM

WASHINGTON - DECEMBER 16: Senate Majority Leader Harry Reid (D-NV) speaks to reporters after a meeting with Senate Democrats on Capitol Hill December 16, 2010 in Washington, DC. (Image credit: Getty Images via @daylife)

After an extraordinary four year dry spell, the Senate has passed a formal budget proposal. It now goes to the House where, mark my words, it has zero chance of passing.

Despite all of the back-slapping, the bill wasn’t all that popular in the Senate. The final vote resulted in a slim victory: 50-49. All Republicans in the Senate voted against the bill, as did four Democrats: Sen. Baucus (D-MT), Sen. Begich (D-AK), Sen. Hagan (D-NC) and Sen. Pryor (D-AR). One Democrat, Sen. Lautenberg (D-NJ) did not vote.

The sticking point for most Senators was a series of tax increases worth a trillion dollars over ten years. Those tax increases, while largely unspecified, would target taxpayers at the top. To make that happen, the budget calls for special fast-track rules to overhaul the tax code (*insert fit of coughing here*).

The Senate budget is very different from the one passed in the House this week. That budget, penned by former vice presidential candidate Paul Ryan (R-WI) focuses on cutting spending, including popular health care and social programs. The significant inconsistencies make the chances of a quick reconciliation between the two unlikely.

Just before the vote, however, the Senate embarked on a so-called “vote-a-rama” addressing a number of amendments. And by “a number”, I don’t mean a few. I mean nearly 500.

Not all of the amendments made it to the Senate floor. Those that did were a mixed bag.

One amendment that had considerable support was the repeal of the tax on medical devices. The tax, which was created under the Patient Protection and Affordable Care Act, has been at the center of controversy since it was first introduced. In particular, the tax was heavily criticized from the medical industry for potentially driving up the cost of health care and possibly sending even more jobs overseas.

Also passed? An amendment asking Senators to donate 20% of their salaries to charity to make themselves feel better about getting paid this year. You may remember that, after getting a raise at the end of 2012 despite not passing a budget or a tax deal, Congress agreed to cut their pay if they couldn’t agree on a new budget by April 15. Er, only there was a slight problem with that: it’s unconstitutional. Of course, you’d expect Congress to know that before passing such a nonsense law to begin with but it’s apparently too much to expect Congress to understand the laws that govern their own pay. So, Congress can happily proceed with budget talks with no real consequences to themselves in sight.

While we’re likely to see fierce politicking between the House and Senate over their competing plans, Congress has some breathing room as the next “crisis” won’t emerge until summer (likely, August) when Congress has to address the debt ceiling or risk a default.

Why A Vote on the Medical Device Excise Tax Is The Biggest Deal Ever for Obamacare