Jobs, Taxes & Benefits

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Celebrity Death Match: Deficit Vs. Defense

Early in the morning on March 12, 2004, the Senate voted to adopt the fiscal 2005 budget resolution that comes to a total of $2.4 trillion.

The proposal, crafted by Senate Budget Committee Chairman Don Nickles’ (R-Ok), will cut the deficit by more than half, to $202 billion, in the next five years.

Though the resolution passed 51-45, debates on the budget have revealed serious disagreement among Republicans, especially between the deficit hawks and the defense hawks.

Hawk fight

Republicans who are deeply concerned about the debt are known on Capitol Hill as "deficit hawks." They feel that spending cuts are required, even of the defense department. These lawmakers consider the deficit to be a major threat to U.S. economic security and feel that fiscal responsibility and a strong military can coexist.

Representative Mark Kirk (R-Il) said the Defense Department budget could be trimmed without compromising the campaigns in Iraq and Afghanistan. As a possible starting point for reform, Kirk pointed to a program that requires the U.S. to pay premiums on coal shipped from West Virginia to U.S. bases in Europe.

"Defense hawks" feel that fulfilling the Commander-In-Chief’s spending request is necessary because the President has stated that we are at war (and may be for some time). They feel that defense is more important than quickly reducing the deficit. John Cornyn (R-TX) feels that Nickles 1.6% reduction in military spending could threaten weapons acquisitions and military operations in Iraq and Afghanistan. They do not necessarily distinguish a difference between the "war on terror" and the two specific military operations.

Elephant and donkey fight

Democrats in the Senate Budget Committee voted against Nickles’ proposal, though not for the defense hawks’ reasons.

Democrats feel that the best way to reduce the deficit is to repeal some of Bush’s tax cuts. Nickles’ plan makes tax cuts permanent while cutting spending on programs that Democrats hold dear, like Medicaid.

Democrats would rather leave Medicaid alone and adjust the estate tax instead. Nickles’ plan repeals the estate tax from 2009-2011, a move that benefits the largest 0.5% of all estates for two years, according to the Center on Budget and Policy Priorities, a liberal think tank.

Pay as you go

Though most Democrats’ amendments were thwarted, Russ Feingold (D-WI) successfully amended the budget resolution to require 60 votes in the Senate to approve new tax cuts or spending. Acquiring 60 votes is difficult since the parties are divided almost evenly. There are 51 Republicans, 48 Democrats, and 1 Independent. If 60 votes cannot be found, the Senate may approve new tax cuts or spending by making up the lost money elsewhere, likely through spending cuts or tax increases in other areas.

This pay-as-you-go policy, often referred to as PAYGO, was part of fiscal policy during the 1990s, when the budget was balanced.

The House has postponed its vote on the budget resolution because deficit hawks there would like to add a PAYGO amendment as well.

Important details

Congress’ budget does not require the president’s signature and it does not dictate the budgets for specific departments. Rather, it sets overall tax and spending limits, which the Appropriations Committee then allocates.

The annual budget resolution also allows Congress to outline a special budget process called reconciliation. Budget reconciliation allows some tax and spending bills to be deemed filibuster-free, meaning the minority cannot stall a vote on the bill. The Wall Street Journal reports that Nickles’ plan protects about $80 billion worth of Bush’s tax cuts through reconciliation -- namely the child tax credit at $1,000 per year, a cut that offsets the “marriage penalty," and an expansion of the 10% tax bracket.

Which do you value more?

Do you agree with deficit hawks, that all forms of spending, including defense, must be trimmed in order to manage the debt? Or do you side with the defense hawks and feel that Bush’s request must be met, even if it means paying the debt back more slowly? Perhaps you reject both of these arguments and have your own solution.

Discuss your point of view with other WomenMatter readers in one of our online forums, and when you’re ready, contact your representatives, and let them know what you think.

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Article Posted on: 3/15/2004

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