WASHINGTON (AFX) - Senate Democrats fell one vote shy Tuesday in their bid to re-impose a rule that requires increases in entitlement spending and tax cuts to be offset in the federal budget.
The Senate voted 50-50 on the amendment to the $2.77 trillion fiscal 2007 budget resolution. A measure fails on a tie vote.
The amendment, sponsored by Sen. Kent Conrad, D-N.D., would have required future increases in entitlement spending to be offset by cuts in other spending or tax increases. Also, future tax cuts would have required reduced spending or tax hikes elsewhere. Such requirements are known as a 'pay-as-you-go', or pay-go, rule. Under the proposal, the required offsets could be waived with a 60-vote supermajority.
'It says, yes, you can have more tax cuts, but you have to pay for them.?You can have more spending on mandatory programs, such as Medicare and Social Security, but you have to pay for them.?That is what pay-go is about.,'said Conrad, the senior Democrat on the Senate Budget Committee.
Such a rule was in place in the 1990s. Many Democrats credit the measure with helping to rein in federal deficits, and argued that its reinstatement would show that Congress is serious about reining in the federal deficit.
Republicans argued the measure would be used primarily to facilitate tax increases.
Since the budget doesn't call for any entitlement spending increases, 'the only thing that it will impact is extending the capital gains and dividends tax, extending the death tax or extending the rates, or any other tax that expires during the window,' Senate Budget Committee Chairman Judd Gregg, R-N.H., told reporters.
Five Republicans - Sens. Susan Collins and Olympia Snowe of Maine, Lincoln Chafee of Rhode Island, John McCain of Arizona, and George Voinovich of Ohio joined 44 Democrats and one independent to vote in favor of the bill. This story was supplied by MarketWatch. For further information see www.marketwatch.com.