Revised April 7, 2003

COMPARING THE HOUSE AND SENATE BUDGETS
by Robert Greenstein and Richard Kogan

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The Senate and House budgets now in conference each would increase deficits by nearly $2 trillion through 2013, with the House budget adding $1.9 trillion to deficits and the Senate budget adding $1.7 trillion.  But the two budgets nevertheless differ in important ways.

Tax Cuts

Entitlement Cuts

Comparison of House and Senate Budgets
(in billions of dollars, cumulative total 2003-2013)

 

 

Senate

House

Tax cuts (not counting health insurance)

                 852

            1,400

Health Insurance initiatives

                   88

                —

Required entitlement cuts

                   —

             -265

Defense increases[1]

                 126

              211

Foreign affairs increases

                   41

                33

Domestic discretionary cuts

                -144

             -244

Prescription drug benefit

                 400

              400

Other mandatory spending

                   15

                19

Increased interest costs

                 347

              361

 

 

 

Total cost and impact on deficits and the debt

             1,725

          1,915

Hefty cuts also would be made in veterans benefits and in programs such as student loans and farms programs.

Cuts in Domestic Discretionary Programs

Cuts in Various Entitlement Programs
Reflected in House Budget
[2]

 

Program

Reductions, 2004-2013,

in billions of dollars

Medicaid

                    $92

Supplemental Security Income

                   18.5

Veterans benefits

                      14

Earned Income Tax Credit

                      14

Food Stamps

                   12.5

Temporary Assistance for Needy Families

                        8

Farm programs

                        7

School lunch and child nutrition programs

                        6

Foster care and adoption assistance

                        4

Child support enforcement

                        3

State Children’s Health Insurance Program (SCHIP)

                        2

Child Care grants to states

                        1

The House budget cuts $15.4 billion from domestic discretionary programs in fiscal year 2004.  At this level, Congress would likely need to cut hundreds of discretionary programs this fall and may fail to meet homeland security needs fully.  In so doing, Congress also would make state and local budget crises more severe.

Paying for the Dividend Tax Cut With Deep Budget Cuts

Fiscal Discipline

Neither budget advances the cause of fiscal discipline, since both would result in substantially larger deficits and increased debt.  The large budget cuts in the House plan and the smaller-but-still-substantial domestic discretionary spending reductions in the Senate plan would do little to provide fiscal discipline since their fiscal effects would be overwhelmed by the tax cuts.

Nevertheless, one difference between the two budgets in the area of fiscal discipline bears noting.  The Senate budget contains an important fiscal discipline measure.

The budget brought to the Senate floor by Senate Budget Committee chairman Don Nickles also contained a reinstatement of the “Pay-As-You-Go Rule,” but in a form that largely made a mockery of the rule.

There is significant risk that the conference committee will attempt quietly to return the “Pay-As-You-Go Rule” to the toothless form in which it emerged from the Budget Committee.


End Notes:

[1]   The difference in defense spending between the House and Senate concerns costs outside of the war and subsequent reconstruction in Iraq.  Neither the Senate nor the House reflects any costs of that war in its budget plans (shown above).  Congress will surely appropriate supplemental funds for the war as needed, and the Senate plan contains a procedure that will facilitate enactment of the extra funding.  The House does not need such a procedure as long as the House Rules Committee and a majority of the House support additional funding.

[2] Assumes entitlement cuts in House budget are made proportionally, which is what House Budget Committee chairman Jim Nussle has said the budget assumes.