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Senate Passes Fiscally Responsible Budget

Press Release

Location: Washington, DC

Budget blueprint for 2008 includes tax relief for Washington families, Cantwell-backed funding for children's healthcare and veterans

Friday, U.S. Senator Maria Cantwell (D-WA) applauded the Senate's approval of a fiscally responsible budget that will eliminate the budget deficit by 2012. The budget, for the first time in six years, also requires all new mandatory spending and tax cuts that increase the deficit to either be paid for or pass by at least 60 votes. The Senate plan includes vital funding for children's health insurance, veterans health care, and first responders, and calls for middle class tax cuts and an extension of the state sales tax deduction.

"Ending the policy of passing our debt on to our grandchildren is critical to ensuring a better future for our country," said Cantwell. "This solid, fiscally responsible budget gives us the foundation we need to really reach long-term solutions to the problems we face. By funding quality care for veterans and uninsured children, supporting education, and putting a high priority on tax fairness for Northwest families, we're setting the right priorities for the year ahead."

The Senate-passed Budget contains several of Cantwell's top priorities, including:

-Up to $50 billion over five years for the State Children's Health Insurance Program (SCHIP): This will deliver health coverage to as many as six million uninsured children. SCHIP is a federal program that helps states cover uninsured low-income children from families with incomes above Medicaid eligibility levels. The president's original proposal included only $5.5 billion over five years. Cantwell is also the author of a proposal, reintroduced earlier this year, to provide coverage to as many as 70,000 uninsured Washington children by freeing up additional SCHIP dollars. Due to SCHIP rules that needlessly punish states leading the way in covering uninsured children, Washington has been forced to turn back $191 million in funds over the past 10 years. Cantwell's legislation would fix this problem.

-Reinstatement of "pay-as-you-go" rules: The rules, which expired in 2002, require new mandatory spending and tax cuts that increase the deficit to either be paid for or pass by at least 60 votes. Cantwell has worked repeatedly to get spending under control by restoring these simple rules.

-Language calling for a permanent state sales tax deduction: This is a clear signal that this deduction is a priority for Congress this year. The approved provision also ensures that enactment of a permanent deduction will be done in a fiscally responsible way and will not add to the federal deficit. The state sales tax deduction allows Washington state taxpayers who itemize to claim a federal deduction for the state and local sales taxes they pay. Taxpayers in states with an income tax can deduct the income taxes they pay. Without a similar deduction for sales taxes, taxpayers in states like Washington with a higher sales tax in place of state income taxes bear a disproportionate share of the tax burden. The current deduction, which Cantwell worked to pass last December, expires at the end of the 2007.

-Language to block the president's attempt to raise Northwest electricity rates: The president's original budget plan once again included a provision to reverse the Bonneville Power Administration's (BPA) decades-old policy of using revenue from the sale of surplus power to lower electricity rates for Northwest consumers. Cantwell worked with the entire Northwest delegation to remove this ill-advised proposal from the budget.

-$43.1 billion for veterans programs, including health care: This amount is nearly equal to the funding level requested by several leading veterans groups. The budget also provides for a three percent raise for military personnel and takes steps to block a plan to charge enrollment fees and deductibles to younger veterans using the TRICARE program. The budget also provides for full funding of the presidents' defense budget request.

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