Congress Turns Focus to Budget Lawmakers in the House and Senate this week take up the $3 trillion budget for the fiscal year that begins Oct. 1. The budget resolutions being debated set tax and spending priorities for the next five years.
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Congress Turns Focus to Budget

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Congress Turns Focus to Budget

Congress Turns Focus to Budget

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RENEE MONTAGNE, host:

And now to a challenge with even more moving parts than the Michigan and Florida primaries. Congress this week takes up a $3 trillion federal budget for fiscal year 2009. It starts next October. The budget resolutions being debated in the House and Senate set tax and spending priorities for the next five years. The proposals are full of noteworthy assumptions. The president's signature tax cuts expire, the war in Iraq ends, the deficit disappears. But the measures do little to address long-term concerns such as unsustainable growth in Social Security, Medicare and Medicaid.

Here to explain the budget debate is NPR congressional correspondent Brian Naylor.

Good morning.

BRIAN NAYLOR: Good morning, Renee.

MONTAGNE: Well, let's start with the three words, three trillion dollars.

(Soundbite of laughter)

NAYLOR: That's three big words. Yeah, most of that money goes to entitlements, the programs, including social security, Medicare, Medicaid, those are kind of on automatic pilot. Congress doesn't have to decide how much to spend on them. The money goes out automatically to beneficiaries based on their age and income, that sort of thing.

Another big chunk goes to the debt Congress doesn't control. That's the nation - the interest on the nation's debt has to be paid. That leaves about a third of the budge, which is what they call discretionary spending. And that's something Congress can control, and that's what Congress and the White House fight about.

MONTAGNE: And that fight, how are Democrats trying to frame the issues?

NAYLOR: Well, the Democrats say that they're going to pass a budget that will fund their important priorities, such as education and health care. They'll give the president what he wants for defense, some half a trillion dollars, not counting the costs of the wars in Iraq and Afghanistan, which neither side has factored in.

Democrats say they'll do all that and in five years they'll have a big surplus, $160 billion or so. And the way they do that is by letting the president's big tax cuts expire.

MONTAGNE: And you know the Republicans have something to say about that.

NAYLOR: Well, right, of course. They call it the biggest tax hike in the history of recorded man or the recorded history. You get the idea.

MONTAGNE: Yeah.

NAYLOR: They say the Democrats want to spend too much, some $18 billion this year. And the president's already promised to veto Democratic spending bills that exceed that ceiling.

The thing about this, Renee, though, is that, you know, it's really empty rhetoric on both sides. The tax cuts don't expire for two years, and Congress isn't going to act until it absolutely has to. The tax issue they do have to deal with this year is the alternative minimum tax, because it's going to affect more and more middle-income taxpayers.

It'll cost $70 billion to sort of fix that. And Democrats say they'll do it, but they're not going to say whether they'll cut spending or cut other - raise other taxes to come up with that money.

MONTAGNE: And this budget looks ahead to 2012…

NAYLOR: Right.

MONTAGNE: …and says that the deficit will disappear. Is that at all realistic?

NAYLOR: Well, only if you assume that Congress, you know, won't extend any of the expiring tax cuts, which they've already said they probably will in terms of the middle-income tax cuts, like the child tax credit, that if you assume that they won't need any more money to fight the wars in Iraq. So, realistic? No.

MONTAGNE: So big budget fight. How do you see this playing out?

NAYLOR: Well, I think, you know, after we get through the rhetoric on both sides, what Democrats are going to try to do is to string this out, pass a series of temporary spending bills and hope that President Obama or Clinton will work with them to institute their priorities. So they're assuming that they're going to get past the Bush administration and work with the next person.

MONTAGNE: So they're not presuming a Republican president, a President McCain?

NAYLOR: Well, the Democrats aren't, certainly. But - right. Obviously, we'll see about that.

MONTAGNE: Thank you very much.

NPR congressional correspondent Brian Naylor.

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