By Larry Jones
March 31, 2003

Following a week of floor debate, the Senate voted on March 26 to approve a $2.2 trillion budget to fund federal programs and agencies in fiscal year 2004. Included in the proposal, which passed by a final vote of 56 to 44, is $384 billion for none defense discretionary programs, which is the pot of money that funds city priorities such as COPS, law enforcement, transportation, community development and job training. This amounts is similar to what the President requested and $11 billion more than the $375 billion in the House version of the budget, which was adopted on March 21 by a vote of 215 to 212 mostly along party lines. Unlike the House version, which assumes cuts in city priority programs such as education and workforce, transportation, and law enforcement, the Senate proposal calls for level funding in most areas and increases for homeland security, highways and mass transit and special education.

Homeland Security

During floor consideration, a number of amendments were adopted to increase funds for several city priorities. In a clear victory for local governments, the Senate voted 97 — 0 for an amendment offered by Senator Thad Cochran (MS) that will add $3.5 billion for homeland security programs this year. This is a high priority of the Conference, as mayors across the nation have been forced to spend significantly more on securing their cities since the 9/11 terrorist attacks.

Transportation

On another Conference priority, the Senate adopted by a vote of 79 — 21 an amendment sponsored by Senator Christopher Bond (MO) that will increase funds for highway and transit programs. Under the amendment, highway and transit programs will be increased by about $8 billion in 2004 and by about $62 billion over the next six years.

Education

By a vote of 89 — 10, the Senate approved an amendment offered by Senator Judd Gregg (N. H.) That will increase funding for special education by $3.3 billion in fiscal years 2004 and 2005.

Economic Stimulus

In a major setback for President Bush, the Senate voted 51 to 48 on March 25 to scale back the President's economic growth package, which includes $726 billion in tax cuts over the next 10 years. With the support of all Democrats and three moderate Republicans (Senators Lincoln Chafee (RI), Olympia Snowe (ME) and George Voinovich (OH)), Senator John Breaux was successful in the getting the Senate to adopt an amendment reducing the size of the President's proposed tax cuts to $350 billion. Also, on an earlier vote on March 21, the Senate voted 52 to 47 to adopt an amendment offered by Senator Russell Feingold (WI) to reduce the size of the President's tax package by $100 billion to create a reserve fund to fund the war in Iraq.

Senators in both parties have expressed concerns about the size of the President's tax cuts, particularly at a time when the nation is at war and the cost is unknown at this time. They have also expressed concerns about providing such a large tax cut when the federal government is facing huge budget deficits which are predicted to reach $330 billion in fiscal year 2004 and $1.34 trillion between fiscal years 2004 and 2013.

The Senate measure differs significantly from the House, which provides for $726 billion in tax cuts, the full amount requested by the President for his economic growth package. With the House budget passing by a slim margin, 215 to 212, it will be very challenging for both houses when they get together in a conference committee starting the week of March 31 to work out a compromise on a final budget. The final budget will have to provide for tax cuts and spending that will receive enough support to pass in both houses. Conservatives in the House say they can not support a final bill that provides tax cuts much lower that the $726 billion in the House bill while moderates in the Senate say they can not supports a bill much higher than the $350 billion in the Senate proposal.

The Conference is still working with other state and local groups in Washington to generate support for bipartisan economic stimulus legislation (S. 201) sponsored by Senators Charles Schumer (NY) and Olympia Snowe (ME) which would Provide $40 billion in general fiscal assistance — $20 billion to states and $20 billion to local governments. Senator Snowe has pledged to work with state and local groups to get the Senate Finance Committee to include general fiscal assistance for state and local governments in any economic stimulus or growth package.