Strategy

Senate Approves $40 Billion Budget Cut

Reductions are to mandatory spending, which automatically increase every year with inflation, and in 2005 accounted for 56 percent of the federal b...
Stephen TaubDecember 21, 2005

The Senate approved $39.7 billion in spending cuts after Vice President Cheney rushed back from a trip to the Middle East to cast the tiebreaker in a 51-to-50 vote.

Five Republican senators voted against the measure, according to published reports.

The bill now returns to the House, which passed a similar measure by a 212-to-206 margin at around dawn on Monday. Although most reports assert that the revised bill will almost certainly pass, many House members have already returned home for the holidays, and a final vote may not be held until January.

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The spending cuts — which will be phased in over five years and affect benefit programs ranging from Medicaid to student loans — are intended to put a dent in a national deficit that topped $319 billion at the end of the September 30 fiscal year, according to Bloomberg. The wire service noted that these are the first attempts to cut increases in spending on benefit programs since 1997.

“This bill is the culmination of a lot of work done in the Congress and by the president and by members of the Republican Party to try to put some discipline into the fiscal accounts of the federal government,” said Sen. Judd Gregg (R-N.H.), chairman of the Budget Committee, reported Bloomberg.

“It robs from the poor to make room for tax giveaways to the wealthiest individuals in the country,” replied Sen. Ted Kennedy (D-Mass.), according to the wire service. “Those who need hope and help are the key losers.”

President Bush wants to cut the budget deficit to $260.5 billion by 2009, added Bloomberg, which noted that the 2006 budget passed by Congress in April called for finding $35 billion in savings over five years from spending cuts and revenue-raising plans.

Bloomberg stressed that the reductions are to mandatory spending — which automatically increase every year with inflation — and in 2005 accounted for 56 percent of the federal budget.