House and Senate Reach FY 2008 Budget Agreement

The Senate and House members working on the proposed budget for the next fiscal year have come to an agreement on the resolution and are preparing to bring the Budget resolution to a vote in both houses. This conference agreement is the basis for the entire budget and Democratic leadership has rejected much of the Presidents budget in favor of their own priorities.

According to House Budget Chair Rep. John Spratt (D-SC), “On all the basics, our budget is better than the President’s. It posts smaller deficits than the President’s budget over five years: adheres to the Pay-As-You-Go principle and contains no new mandatory spending not paid for. Within this framework, our budget does more for veterans’ health care, more for education and more for children’s health care.”

Under their resolution the budget will reach a surplus of $41 billion in 2012. Both national defense and domestic priorities receive robust funding under the resolution. Domestic discretionary programs get a boost of $954 billion, $20 billion more than the Presidents recommendations. Domestic programs such as education will receive an increase of $9.5 billion above the Presidents’ request.

Tax increases will not be used by Democrats to pay for their priorities. Their revenue plan is a mix of tax relief and closing the tax gap. Middle class tax relief is achieved by extending the marriage penalty relief, the child tax credit and the 10 percent bracket. The AMT (Alternative Minimum Tax) will not expand in 2007 protecting 20 million taxpayers . Aggressive tax enforcement, shutting down abusive tax shelters and offshore tax havens are how Dems intend to close the tax gap.