House And Senate GOP Leave Room For Tax Cuts In Budget Agreement

by Leroy Baker, Tax-News.com, New York

29 April 2005

House and Senate Republican leaders have reached an agreement on a 2006 budget that will seek to wring deep savings from government-funded healthcare program over the next five years, whilst ensuring billions of dollars in tax cuts.

It is envisaged that the $2.6 trillion budget for next year will chop $35 billion off the Medicaid bill and leave the door open for around $70 billion in tax cuts.

In attempting to curb the budget deficit, the tentative agreement also relies on savings from farm, student loan and pension programs to achieve the goal of cutting deficits in half over the next five years.

The plan, which is non-binding and does not require the signature of President Bush, has still to receive the backing of the full House and Senate, although Senate Budget Committee chairman Judd Gregg (R-NH) believes this could be achieved by the end of the week before Congress heads off for a week-long break.

"The House will take up the budget and pass it and then we will take up the budget and pass it this week," commented Gregg.

The budget will need just 51 votes to pass through the Senate where Republicans currently hold 55 seats. However, it is feared by some GOP leaders that the budget's path could yet be blocked by conservatives demanding deeper cuts in the budget deficit.

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