GOP Agenda Still in Turmoil as Congress Grants Itself Six-Week Extension

For Immediate Release:

September 30, 2005

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by Dustin Stamper

Tax Analysts

With a new fiscal year imminent and most of their spending bills left unfinished, congressional Republicans on September 29 were forced to act on a temporary funding extension while struggling to regain control of their agenda.

The Senate is scheduled to vote September 30 on the continuing resolution, which will fund the government through November 18. The House hurried the measure through its chamber on September 29 -- but not before the mundane effort turned into a tax spat. Democrats used the resolution to highlight the mounting deficits and "irresponsible" tax cuts that they said have characterized Republican stewardship of the federal budget.

"Again this year, the majority has failed to complete its appropriations work on time," said House Minority Whip Steny H. Hoyer, D-Md. "But what is far worse is that the Republican majority -- due to its obsession with tax cuts at a time of war and its unwillingness to make hard choices -- has marched our nation right back to the precipice of debilitating deficits and debt."

Rep. David R. Obey, D-Wis., tried in vain to block the continuing resolution in the House, launching attacks at Republicans. According to Obey, the fiscal ship could be righted simply by siphoning the "trillion dollars" in tax breaks that Republicans have given to the wealthy.

"If you vote for this continuing resolution today, you're voting to keep those giant tax cuts in place," he said.

Republicans are still planning to complete a $70 billion tax cut package and Gulf Coast stimulus package this year, but congressional deliberations continued to descend into infighting and partisan bickering. A day after losing their leader, Rep. Tom DeLay, R-Texas, to a criminal indictment, the Republicans faced growing questions about the legitimacy of their agenda.

"I hope it's derailed," said House Minority Leader Nancy Pelosi, D-Calif. "Because the Republican agenda in Congress has been an agenda for the special interest against the interest of the American people, and I hope that it will be derailed."

In response to a joint request from Budget Committee chairs in both chambers, the Congressional Budget Office told lawmakers that federal reserves would be strained by the effects of the two hurricanes. The CBO predicted that although those economic effects would be minor, relief legislation could strain federal reserves.
"Because the overall economic impacts will probably be . . . reversed by the end of fiscal 2006, the budgetary effects will be largely the result of legislation," wrote CBO Director Douglas Holtz-Eakin.

Congress has already cleared one tax relief package for hurricane victims, and a more comprehensive bill to spur long-te m economic growth is expected soon. The Senate Finance Committee scheduled a second hearing on tax policy for rebuilding the Gulf Coast economy for October 6.

The House is not expected to hold any hearings before putting together its bill. Several Ways and Means members told Tax Analysts that they are working with the Senate on parts of the legislation and plan to release their version before the October 10 recess.

"I think we're going to do it as early as next week," said Rep. Paul Ryan, R-Wis.