Capitol Hill Republicans were downright giddy earlier this year when they forced Senate Democrats into agreeing to pass a formal budget resolution for the first time in four years.

Now Senate Democrats are trying to turn the tables on Republicans, demanding that the GOP allow the budget process to move forward by naming negotiators to hammer out a formal budget accord with the House.

T.J. Kirkpatrick / Getty Images

Senate Majority Leader Harry Reid (D-NV)

Senate Majority Leader Harry Reid, D-Nev., sought Tuesday morning to name 12 senators -- seven Democrats, five Republicans -- to a formal legislative "conference," the process which takes place when the House and Senate pass different versions of the same measure (in this case, a budget resolution).

"They're no longer interested in regular order, even though they preached that for years," said Reid, referring to the slow-moving, formal legislative management process for which many Republican leaders have clamored. "They don't want to go to conference and work things out. They don't even want to name conferees."

Reid added: "It seems House Republicans don't want to be seen discussing even the possibility of compromise with Democrats, for fear that there will be a Tea Party revolt."

Republicans counter that moving toward a former conference process usually involves some level of pre-negotiation that lays the groundwork for an eventual agreement.

"To go to conference right now strikes us as not making much sense," explained Senate Minority Leader Mitch McConnell, R-Ky., following a lunch with fellow Republicans.

And while House Speaker John Boehner, R-Ohio, described ongoing conversations between his chief budgetary lieutenant, Wisconsin Rep. Paul Ryan, and Senate Budget Committee Chairwoman Patty Murray, D-Wash., the speaker echoed McConnell in resisting a conference.

Although budget resolutions are often a political exercise -- more often, they represent the priorities of a party than any serious attempt at governing -- Democrats are now trying to seize the initiative on the topic.

House Republicans for years pummeled the Senate Democratic leadership for failing to pass a budget, pointing to the lack of one as a sign of fiscal recklessness. (Reid has said there was no need to pass an overarching budget, given the various fiscal agreements that govern spending levels.)

The House GOP's canard earlier this year, in which they tied a three-month extension in the debt limit to the Senate passing a budget (or endure a pay forfeiture otherwise), was designed to exploit that very lack of a budget.

Democrats are now trying to turn that political maneuvering back against Republicans.

"If the Republicans are serious about reducing the deficit, we need to get to work -- get to work sooner, rather than later," Reid said.

This story was originally published on Tue Apr 23, 2013 3:45 PM EDT

The proposed Fiscal Year 2014 budget which President Barack Obama unveiled Wednesday would raise taxes for some Americans, not all of them upper-income earners, while awarding tax breaks to particular groups and interests such as college students, people who don’t save for retirement, and investors in low-income neighborhoods.

What’s most notable in the Obama plan is that despite much talk from the Simpson-Bowles commission and from other reformers of simplifying the tax code, Obama would, if Congress passed his plan, still be very much in the business of using the tax code to try to fine-tune the economy and engineer certain policy outcomes.

This targeted tax break approach seems exactly opposed to the tax reform effort that the chairmen of the House and Senate tax-writing committees are planning later this year.

Under his plan – which covers the next 10 years – tax revenues would be nearly $1 trillion higher than the baseline current-law forecast by the Congressional Budget Office. Much of that additional revenue would come from tax increases he is proposing.

The president seeks to increase taxes by far more than the $600 billion tax increase in the American Taxpayer Relief Act (ATRA) of 2012 which he signed into law on Jan 2.

He would get the $580 billion by reducing certain tax preferences for upper-income earners. He would limit the value of itemized deductions to 28 percent for families in the highest tax brackets – an idea he offered in his very first budget proposal back in 2009.

Among the other tax increases Obama proposes:

• A new “Financial Crisis Responsibility Fee” imposed on large banks and financial institutions, a kind of retroactive charge five years after the 2008 bailout of the financial sector. The fee is intended “to fully compensate taxpayers for the support they provided to the financial sector during the 2008–2009 economic crisis and to discourage excessive risk-taking” in the future, the president’s budget document says. If enacted, this targeted financial sector tax would raise nearly $60 billion, budget officials say.
• An increase in the estate and gift tax of nearly $72 billion. This was an issue Congress thought it had settled when it passed ATRA at the end of 2012.
• $78 billion in increased taxes on cigarettes and tobacco products.
• $44 billion in tax increases on oil, natural gas and coal producers by eliminating certain tax breaks for those industries.
• $10.7 billion from indexing all tax penalties to the inflation rate.
• $9.3 billion from limiting the amount of money that higher-income people could put in tax-sheltered retirement accounts.

Yuri Gripas / Reuters

A staff member prepares the release and distribution of President Barack Obama's Fiscal Year 2014 Budget at the Government Printing Office in Washington April 10, 2013.

Many of these tax increases can be seen as part of an ongoing project by the president to shift more of the burden of paying for government and especially entitlement programs to upper-income Americans, both retirees and the currently employed.

In the same vein, the president again offered certain Medicare ideas he'd included in his budget plan last year: $68 billion in higher premiums, co-payments and surcharges for mostly higher-income Medicare recipients.

He’d get another $120 billion or so in revenue by tweaking the inflation indexing formula used to set the levels for the tax brackets, the standard deduction, and other provisions in tax law.

But on the other hand Obama also proposes an array of new tax breaks.

For example, he seeks:

• A 10 percent tax credit for small businesses that hire new employees or increase wages. This would cost $25.7 billion in lost revenue.
• Creation of tax-preferred "Promise Zones” in high-poverty communities which would provide tax breaks for hiring workers and investing within the zones, an idea somewhat reminiscent of former Housing Secretary Jack Kemp's Urban Enterprise Zones. This would cost $5.3 billion in lost revenue.
• A new tax-preferred bond program called America Fast Forward Bonds, at a cost of $10 billion, for public school construction.
• A new tax credit to encourage employers to offer retirement savings plans and to automatically enroll workers in them. Cost: $17.6 billion.

Obama’s proposal also makes some assumptions about future spending that might not turn out to be realistic: for example, it forecasts nearly $1.8 trillion in savings from overseas military operations that it assumes will not take place during the next 10 years.

The Obama blueprint isn’t likely to be adopted, but some of its specific proposals might be, if the president can use his persuasive power to bring Republican members of Congress to accept at least some of his new tax increases.

The initial response from GOP leaders was at best tepid.

“The document headed our way does not appear designed to bridge the differences between the House- and Senate-passed budgets. That’s the role Americans would expect the president to play at this stage,” said Senate Republican Leader Mitch McConnell.

President Barack Obama unveiled his proposed Fiscal Year 2014 budget plan Wednesday in the White House Rose Garden, offering a combination of new spending initiatives and tax increases aimed at creating jobs and reducing future budget deficits.

In his remarks, Obama called his plan “a fiscally responsible blueprint for middle-class jobs and growth.”

He said, “We can grow our economy and shrink our deficits. In fact, as we saw in the 1990s, nothing shrinks deficits faster than a growing economy.”

He acknowledged that “too many Americans still looking for work” and said he’d address that problem by new spending which he called “targeted investments in areas which will create jobs right now.” He called for $1 billion on creation of new manufacturing innovation institutes. 

The Obama plan also calls for $50 billion for repairing highways, bridges, and mass transit systems.

He also said Congress would have to make some changes in Medicare to reduce future outlays on that program “but they don’t have to drastic ones.”

Obama proposes to increase taxes by well more than the $600 billion tax increase he signed into law on Jan. 2. For starters, he would aim to get the $580 billion by eliminating certain tax preferences for upper-income people.

His plan would also get another $124 billion or so in revenue over ten years by tweaking the inflation indexing formula used to set the levels for the tax brackets and other provisions in tax law. The change in inflation indexing would also apply to Social sec and other federal benefits, which has prompted vocal opposition from some progressives in Obama’s party.

He also proposed to raise cigarette taxes in order to help pay for preschool for children of lower-income and middle-income families.

Larry Downing / Reuters

President Barack Obama talks about the Fiscal Year 2014 Budget while next to acting Director of Office of Management and Budget Jeffrey Zients in the Rose Garden at the White House in Washington, April 10, 2013.

The Obama plan also calls for new spending, such as $50 billion for repairing highways, bridges, and mass transit systems.

The president’s budget proposal came late – nine weeks after the first Monday in February, the statutory deadline set by the 1974 Budget Act. It also came after the House and Senate had already passed their very different FY 2014 budget proposals.

The initial response to the Obama plan from Republican congressional leaders indicated that negotiations with them at this stage would not be fruitful.

“It’s not a serious plan, for the most part just another left-wing wish list,” said Senate Republican Leader Mitch McConnell who spoke on the Senate floor about an hour before Obama delivered his remarks at the White House. Highlights of the Obama plan had been released by administration officials last week and Wednesday morning before the president spoke.

“The document headed our way does not appear designed to bridge the differences between the House and Senate-passed budgets. That’s the role Americans would expect the president to play at this stage,” McConnell said.

The Obama plan, he scoffed, “does not represent some grand pivot from left to center. It’s really just a pivot from left – to left.”

But McConnell did praise Obama on one point: “the president seems prepared to finally concede this time that at least something needs to be done to save entitlements from their inevitable slide toward bankruptcy. I’m glad to see him begin to come to grips with the math here.”

House Speaker John Boehner agreed with McConnell on that point: Obama, he said, “does deserve some credit for incremental entitlement reforms they have outlined in this budget. But I would hope that he not hold hostage these modest reforms for his demand for bigger tax hikes. Why don’t we do what we can agree to do? What don’t we find the common ground that we do have and then move on that?”

President Barack Obama will stick to his forthcoming budget on Wednesday, and does not regard it as a "starting point" for negotiations with Republicans toward a fiscal deal.

The administration's 2014 budget — which Obama will introduce at 11:15 a.m. on Wednesday — seeks an additional $1.8 trillion in savings through a combination of new revenues, entitlement reforms and targeted cuts to discretionary spending. The budget contains spending adding up to $3.77 trillion.

And while GOP lawmakers have expressed skepticism toward Obama's new budget, particularly for its inclusion of new taxes, the White House argued Tuesday in previewing the announcement that Republicans shouldn't be so dismissive.

"We don't view this budget as a starting point in the negotiations," one senior administration official said on a conference call previewing the budget. "This is an offer where the president came more than halfway."

“The question is, are Republicans willing to come to us?” the official asked, saying that the administration would be "sticking" to its position.

"If they refuse to include revenues in any deal, then there will be no deal. it's that simple."

Obama offered a change in how Social Security benefits increase over time (so-called "chained CPI") in hopes of drawing Republicans into begrudging agreement on proposals to raise new revenue. Among those revenue-raising provisions were:

• Enacting the so-called "Buffett Rule," which would require households making over $1 million to pay at least 30 percent of their income in taxes
• Limiting tax deductions to up to 28 percent of income for the top 2 percent of earners in the United States
• Expanding a tax credit for middle-class families to pay for child care
• Funding universal preschool, something Obama called for in his State of the Union address, through an increase in the federal tax on cigarettes and other tobacco products
• Establishing of a National Infrastructure Bank, which in April 2013 Obama said could raise $10 billion, with each federal dollar leveraging up to $20 in total investment 
• Paying for the launch of 15 “manufacturing innovation institutes,” whose $1 billion price tag was first floated during the State of the Union 

This story was originally published on Wed Apr 10, 2013 6:31 AM EDT

Susan Walsh / AP

President Barack Obama gestures as he speaks during an Easter Prayer Breakfast in the East Room of the White House in Washington, Friday, April 5, 2013.

With the Friday release of ingredients of President Barack Obama’s budget proposal for the new fiscal year, it is clear that the fiscal policy divide remains as wide as ever between Democrats and Republicans.

Obama will once again propose some changes in entitlement programs — such as a new formula for Social Security, which would effectively reduce retirement benefits, and raising the premiums that upper-income Medicare beneficiaries would need to pay for coverage.

Some Republicans have supported such proposals in the past and might support them now.

But in a sense it’s the summer of 2011 all over again, when a tentative deal between Obama and House Speaker John Boehner collapsed. For example, the new formula for Social Security benefits, called “chained CPI,” was part of the failed Obama-Boehner negotiations in 2011.

However, there’s been one decisive change since that busted budget deal two years ago: On Jan. 2, Obama signed into law a tax increase worth about $600 billion over ten years. Since then, Republican congressional leaders have repeatedly rejected Obama’s and other Democrats’ calls for another round of tax increases.

After elements of Obama’s Fiscal Year 2014 budget plan were reported Friday, former congressional Budget Committee staffer Stan Collender said, “A grand bargain is still a long way — as in years — away. The president may get an agreement that can pass the Senate (although I doubt it), but the real problem is, and always has been, the House. The House GOP can't agree to additional revenues without risking its majority status so it won’t much care about what the Senate GOP agrees to do.”

House Speaker John Boehner signaled just that in response to the president’s budget. “If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes. That's no way to lead and move the country forward," Boehner said. 

Among House Republicans a deep-seated skepticism remains that increased revenue would actually be used for deficit reduction, instead of paying for new federal entitlements.

In simplest terms, here’s how the three different budget blueprints offered by Obama, Senate Democrats and House Republicans compare:

The Obama plan: Higher taxes through elimination of certain tax preferences for upper-income people; more cost-sharing by upper-income people for Medicare benefits; reductions in Social Security benefits through the new “chained CPI” formula.

The Senate Democrats’ plan: Higher taxes through elimination of certain tax preferences for upper-income people; some relatively small cost-saving changes in Medicare.

The House Republicans: Tax reform through lowering income tax rates and eliminating most tax credits and other preferences – but no additional revenue to be raised, other than from greater efficiency of a reformed tax code; fundamental change in Medicare for those who become eligible for benefits in 2024 or later, making the program a more market-based system, with subsidies for lower-income and sicker beneficiaries.

If an accord is to be reached between Obama and Republicans, the chained CPI idea could be one building block of a deal, but Collender cautions “only if (new tax) revenues are part of the equation. Obama — and congressional Democrats won't agree to that without getting the tax changes they want in return.”

And Democrats signaled displeasure with the president’s inclusion of changes in Social Security. Congressional Progressive Caucus co-chairs Reps. Raul Grijalva, D-Ariz., and Keith Ellison, D-Minn., said Friday that when dealing with the Republicans, Obama “should not try to bargain for their good will with policies that hurt our seniors….”

They said any cuts in Social Security benefits “could be disastrous for our economy because the recession has led more seniors to rely to Social Security for income.”

Meanwhile, the discouraging employment data released Friday underscored the continued need for more federal revenue. With faster economic growth and more jobs being created, federal revenues would begin to return to their normal levels and would help reduce deficits and slow the growth of the federal debt.

There was some good news on the revenue front Friday as the CBO reported that individual income and payroll tax revenues increased by 12 percent in the first six months of the fiscal year, compared to the same period in the prior year. This was partly due to the tax increase that Obama signed into law.

From 1997 to 2007, federal revenues averaged 18.5 percent of gross domestic product. In fiscal year 2012, revenues were only 15.8 percent of GDP and the Congressional Budget Office estimates they will amount to 16.9 percent of GDP in the current fiscal year.

Some veteran budget observers look back on the year-end fiscal cliff deal Obama struck with GOP leaders as a lost opportunity to get more revenue.

“The amount of revenue that was generated by the deal was far lower than the president and the Democrats had hoped for, and even lower than the amount the Republicans seemed willing at various times to put on the table,” former CBO director Robert Reischauer noted right after Obama signed the tax increase into law.

The deal Obama agreed to at the end of 2012, Reischauer said, will signal that higher income tax rates “are off the table in the future” – which he said was “very damaging” since higher revenues will be needed over the next few decades.

One interesting new element in Obama’s proposal leaked Friday is sure to spark more discussion in the weeks ahead: limiting tax sheltered retirement accounts.

A senior administration official said the budget plan will include a proposal to prohibit individuals from accumulating over $3 million in Individual Retirement Accounts (IRAs), 401k accounts, and other tax-preferred retirement accounts.

Under current law, some Americans can accumulate millions of dollars in their retirement accounts, which this official said is “substantially more than is needed to fund reasonable levels of retirement saving.”

This proposal is yet another indication that the relentless search for more revenue continues.

Related: 

Obama to offer compromise budget to Republicans

Boehner says Obama holding entitlement reform 'hostage' for tax hikes

WASHINGTON -- The Senate on Saturday narrowly passed its first federal budget in four years, a move that will usher in a relative lull in Washington's fiscal wars until an anticipated summer showdown over raising the debt ceiling.

The budget plan was passed by a 50-49 vote in the Democratic-controlled chamber. Four Democratic senators facing tough re-election campaigns in 2014 joined all the Senate Republicans in opposing the measure, which seeks to raise nearly $1 trillion in new tax revenues by closing some tax breaks for the wealthy.

The Senate budget, which reflects Democratic priorities of boosting near-term job growth and preserving social safety net programs, will square off in coming months against a Republican-focused budget passed by the Republican-dominated House of Representatives.

Neither of the non-binding blueprints has a chance of passage in the opposing chamber, leaving Congress no closer to resolving deep differences over how to shrink U.S. deficits and grow the economy. But they give each party a platform from which to tout their respective fiscal visions.

The Democrats' plan from Senate Budget Committee Chairman Patty Murray aims to reduce deficits by $1.85 trillion over 10 years through an equal mix of tax increases and spending cuts.

The Republican plan from House Budget Committee Chairman Paul Ryan seeks $4.6 trillion in savings over the same period without raising new taxes. It aims to reach a small surplus by 2023 through deep cuts to health care and social programs that aid the poor.

"The House budget changes our debt course, while the Senate budget does not," said Senator Jeff Sessions, the top Republican on the Senate Budget Committee. 

'Very different' values
Murray said after the vote that she would try to work with Ryan on a path toward compromise.

"While it is clear that the policies, values, and priorities of the Senate budget are very different than those articulated in the House budget, I know the American people are expecting us to work together to end the gridlock and find common ground, and I plan to continue doing exactly that."

Passage of a stop-gap government funding measure on Thursday lowered the temperature in the budget debate by eliminating the threat of a government shutdown next week.

"We're going to get a breather here. Congress will let things cool off a bit and there'll be other issues that come to the forefront in the spring," said Greg Valliere, chief political strategist at Potomac Research Group, a firm that advises institutional investors on Washington politics.

These issues include legislation on gun control, immigration reform and initial work on simplifying the tax code, which is particularly important to Republicans.

Joining Republicans in opposing the Democratic budget were Democratic senators from conservative-leaning states: Max Baucus of Montana, Mark Begich of Alaska, Kay Hagan of North Carolina and Mark Pryor of Arkansas.

Voting for a budget that raises tax revenues could increase their vulnerability in congressional elections next year and put Democrats' thin majority at risk.

In the lead-up to the Senate vote early on Saturday morning, the body considered more than 100 largely symbolic, non-binding amendments to the budget aimed at scoring political points and staking out positions.

Among notable amendments, the Senate signaled strong support for allowing states more authority to collect sales taxes on Internet purchases, for approval of the controversial Canada-to-Texas Keystone XL oil pipeline and for repealing a tax on medical devices imposed by President Barack Obama's health care reform law.

The Senate also voted 99-0 to end policies that subsidized large banks considered "too big to fail" but came out against imposing taxes on industrial carbon emissions.

The Senate had not passed a budget resolution since 2009 because of fiscal policy disputes with House Republicans that forced Congress to turn to numerous stop-gap spending measures to avoid government shutdowns. 

Related:

Budget battles: What you need to know

As they prepare to take a two-week Easter break, Congress has been busy passing bills and resolutions on taxes and spending, but there are several budget paths converging all at once.  What does all the action really mean? Here’s a guide to what’s happening:

Both houses of Congress this week passed a $1.27 trillion spending bill to keep the government operating for the rest of the fiscal year, that is, until Sept. 30. Was that bill part of the process of designing a budget for the government?

No. That bill – passed by the House on Thursday and by the Senate on Wednesday – was a measure to keep non-entitlement spending at current levels until the end of fiscal year 2013. That bill is separate from the plan – called the budget resolution -- for the new fiscal year which begins on Oct. 1.

This week the House and Senate have each been working on their own budget resolutions for the coming fiscal year.

Recommended: Senate votes to kill part of 2010 health care overhaul

What did that spending bill have to do with the spending reductions required by the Budget Control Act of 2011 – the so-called “sequester”?

That bill abides by the spending limits sets by the Budget Control Act. It does not try to undo those limits.

What exactly is the budget resolution which each house of Congress was working on Thursday and Friday?

The budget resolution is a blueprint for spending and for revenues. It does not specify exactly how much money will be spent in the coming fiscal year, for example, on the federal inspectors who check on meat, poultry, and eggs. Nor does the blueprint in itself appropriate money to be spent. Instead it sets broad targets and creates a framework within which Congress will consider separate revenue and spending bills.

Does the budget resolution apply only to the coming fiscal year that starts on Oct. 1?

No, it attempts to set goals for ten years, through 2023.

Can a budget blueprint that’s being voted on this week accurately reflect what economic conditions might be in 2016 or 2018 or 2023?

No. If, for instance, there were another recession in 2016, revenues would decrease since workers would lose their jobs and not be paying income taxes.

But Congress uses a budget “baseline,” a set of assumptions, prepared by the nonpartisan Congressional Budget Office to try to forecast what employment levels will be during the next ten years, what interest rates will be, etc. The CBO baseline also assumes that current laws – such as the tax law that Obama signed on Jan. 2 -- will remain in effect and will not subsequently be changed by Congress.

If the House and Senate each pass different budget resolutions, would they need to negotiate in a conference committee a compromise version of a budget?

Yes, but since their budget blueprints plans are so different they may not try to do that. If so, there would no official budget resolution for Fiscal Year 2014. Sarah Binder, an expert on Congress at George Washington University and the Brookings Institution, said Thursday, “There doesn’t seem to be any hope of going to conference and actually doing the real budget process.”

Did Congress pass a budget resolution last year?

No. The Senate has not passed a budget resolution in four years.

Without a budget resolution, will federal spending stop?

No, spending continues under either a temporary spending bill similar to the one now in effect, or by means of specific appropriations bills for the departments and agencies.

What are the main features of the blueprint which the House passed on Thursday – and how does that proposal differ from the Senate Democrats’ plan?

Under the leadership of House Budget Committee chairman Rep. Paul Ryan, the House passed a plan that would sharply reduce federal debt as a percentage of national income and would reduce Medicaid and other health care spending as a percentage of national income. Ryan’s proposal would also make fundamental changes in the Medicare program for people who’d become eligible for benefits in 2024 or later. Ryan’s plan would offer the choice of traditional fee-for-service Medicare along with private health care plans. His critics charge that this would lead to the demise of the traditional Medicare design.

Senate Democrats’ plan offered by Budget Committee chairman Sen. Patty Murray, D- Wash., would preserve the current design of Medicare. It would also instruct the Senate Finance Committee to come up with legislation by Oct. 1 that would raise $975 billion in new tax revenues over the next ten years. That legislation would not be subject to a Senate filibuster.

If a budget blueprint is more or less a statement of goals for a ten-year period, how much real significance does it have?

It’s a statement of the priorities the Senate or House majority has, for example, on education or defense.

But what’s especially important in the Senate is that the budget process can be used to circumvent the requirement that bills have 60 votes before advancing to final passage.

Using a process called “reconciliation,” the Senate can pass a budget measure with only 51 votes.

Given the current political lineup, in order to enact tax reform or entitlement reform into law, Senate Democrats would need their plan to be approved by a Republican-majority House.

How can the Senate budget debate be used to score points for the 2014 elections?

Over time the Senate has developed a process called the “vote-a-rama,” which allows senators to offer a theoretically unlimited number of amendments to the budget resolution.

Some of these amendments may be simple statements of belief or perhaps might be used to put senators up for reelection in 2014 in an awkward spot explaining why they voted against it.

For example, Sen. David Vitter, R- La., said Thursday he’ll be offering amendments to end automatic pay increases for members of Congress, to require photo identification for voting in federal elections, to set up an entry-exit system to determine whether foreign visitors to the United States leave when their visas expire, and to halt greenhouse gas regulations until the governments of China, India and Russia implement similar rules to reduce emissions in their countries. 

This story was originally published on Fri Mar 22, 2013 8:44 AM EDT

The House of Representatives successfully passed Republicans' 2014 budget on Thursday with four votes to spare, relying only upon GOP votes to advance Wisconsin Rep. Paul Ryan's third budget blueprint.

The House voted 221-207, largely along party lines, to advance the budget for the next government fiscal year. The plan seeks to balance the budget within a decade, primarily by saving $4.6 trillion through cuts to spending, and reforms to Medicare that would transform the plan into a "premium support" (or voucher) system.

Ten Republicans joined with Democrats, all of whom opposed the Ryan budget, to vote against the plan. Due to the defections, Republicans only passed their budget by an extra margin of four votes. Ten Republicans also opposed last year's budget, though there were 241 total GOP members of the House last year, versus 232 sitting Republicans at the time of today's vote.

The budget is the third passed by Republicans since retaking the House in the 2010 elections. But like the two preceding budgets, Ryan's 2014 fiscal blueprint will likely never become law, due to opposition from both the president and Senate Democrats.

The House moved quickly following the budget vote to pass legislation settling spending levels for the rest of this fiscal year, which concludes at the end of September.

The House voted 318-109 with bipartisan support to pass a continuing resolution funding the government through that date, averting a government shutdown that would have occurred at the end of March if spending authority had run out. The Senate passed that legislation on Wednesday, and it now heads to the White House for President Barack Obama's signature, once he returns from a foreign trip to Israel.

Republicans set the stage for this spring's fiscal battles by readying the debut of their new budget blueprint on Tuesday, which they said would achieve $4.6 trillion in savings and balance the U.S. budget within a decade. 

Rep. Paul Ryan, R-Wis., argued that his forthcoming budget — the third he's authored as chairman of the House Budget Committee — would be able to achieve a balanced budget by 2023, and boost the gross national product by as much as 1.7 percent in the meanwhile. 

The plan is unlikely to ever become law in its entirety; it assumes a repeal of President Barack Obama's health care reform law, and collects no new revenue from taxes, two elements which are unpalatable to Democrats. 

But budgets are often more political statements about a party's priorities than a hard governing blueprint. With that in mind, Ryan, the 2012 GOP vice presidential nominee, sought to inoculate Republicans from criticism of the budget, and play offense against Democrats' forthcoming budget. 

"Our opponents will shout austerity, but let's put this in perspective," Ryan wrote in an op-ed to be published in Tuesday's Wall Street Journal. "On the current path, spending will increase by 5 percent each year. Under our proposal, it will increase by 3.4 percent. Because the U.S. economy will grow faster than spending, the budget will balance by 2023, and debt held by the public will drop to just over half the size of the economy."

Ryan was set to detail his full plan in a press conference on Tuesday morning, but his op-ed contained key elements of the budget. Ryan's plan would:

• Achieve a total of $4.6 trillion in savings over the next decade
• Enact tax reform that closes loopholes and deductions, while reducing the number of income brackets to two — one at 10 percent, the other at 25 percent
• Change Medicare to a model in which future retirees would receive "premium supports" (Democrats call them vouchers) to subsidize the purchase of insurance from a menu of options, including traditional Medicare
• Repeal the president's health care reform law
• Approve the proposed Keystone XL transnational oil pipeline
• Enact welfare reforms to give states more flexibility in enforcing the program

There are other aspects of Ryan's plan that the Wisconsin congressman will outline tomorrow. Many elements of the new Ryan budget are familiar Republican proposals, weaved together in a comprehensive statement of governing principles. 

The new budget, however, is only the opening salvo in a budget battle that could stretch throughout much of the spring. Congress acted earlier this year to extend the debt limit through mid-May, but only on the condition that the House and the Senate each pass a budget. The Senate budget, authored by Democrats, and their first in years, is also due this week.

And the political fighting over the dueling proposals has already begun. 

"I hate to break the suspense, but their budget won't balance—ever," Ryan wrote. "We House Republicans have done our part … Now we invite the president and Senate Democrats to join in the effort."

President Barack Obama is getting some surprising kudos from a group of unlikely lawmakers … Republican senators.

As part of a recent outreach effort from the White House, the president is making phone calls to some senators from across the aisle as they craft a new budget for the coming fiscal year.

“The important thing is that for the first time in a very long time the president appears to be doing some outreach to both Republicans and Democrats -- and that’s long overdue,” said Sen. Susan Collins, R- Maine, who said Obama had called her on Monday.

What appears a renewed possibility as a result of the president’s outreach is the kind of tradeoff that Obama and House Speaker John Boehner discussed back in 2011: Republicans would agree to increases in tax revenue -- as a result of reform of the tax code -- in return for Democrats accepting changes and potential cost savings in entitlement programs such as Medicare.

Sen. Lindsey Graham, R-S.C., who also chatted on the phone with the president, said, “What I see from the president is incredibly encouraging. I think there's a consensus building that without entitlement reform we're going to become Greece, and I think to get our Democratic friends to move on entitlements, we're going to have to move on revenue by flattening the tax code, eliminating deductions and preserving some of that money for the debt.”

“I got a call over the weekend,” Sen. Rob Portman, R-Ohio, told reporters Tuesday.

He wouldn’t discuss the details of his conversation with Obama, but when asked whether he favored a tax reform bill that raised new revenue by eliminating tax breaks, or wanted one that was revenue neutral, Portman said, “I would like to see tax reform because I think it will help the economy and there are very few things we can do around this place that’s going to give the economy a bigger shot in the arm.”

But he added cautiously, “If revenue is diverted from tax reform into deficit savings, it takes away some of the economic benefit of tax reform.”

Obama’s effort comes as the focus on Capitol Hill has quickly shifted from the spending cuts known as “the sequester” to negotiations over a budget plan for the new fiscal year which begins on Oct. 1.

Senate Budget Committee chairman Sen. Patty Murray, D-Wash., will unveil, probably next week, a budget resolution that will set revenue and spending targets for the coming fiscal year.

The order of the day for Democrats is: find more revenue. The target of Murray and some other Democrats: provisions in the tax code that benefit specific groups -- known as “tax expenditures.”

Economists say that these tax preferences, which include the tax-free status of employer-provided health insurance, are in effect a form of federal spending going to favored groups.

At a hearing of Murray’s committee Tuesday, one Democratic witness, economist Jared Bernstein, a former aide to Vice President Joe Biden, said, “If you believe we have a spending problem, you should also believe we have a tax expenditure problem.”

But committee ranking Republican, Sen. Jeff Sessions, R-Ala., said eliminating a tax expenditure “is a tax increase. You can’t spin it any other way.”

Using a process called budget reconciliation, Democrats could pass tax increases with only 51 votes. But prior to that, there would need to be an accord with House Republicans on a joint budget resolution -- something that right now seems a remote possibility.

Obama's renewed focus on Senate Republicans seems to imply that he sees little to be gained at this moment from further attempts to bargain with Boehner.

Yet to be seen: how Murray’s budget resolution interacts with the efforts of the Senate Finance Committee chairman Sen. Max Baucus, D-Mont., to pass comprehensive tax reform.

Baucus thinks the budget reconciliation process is not the preferred path to comprehensive tax reform. Under Senate rules, the budget reconciliation process is very constricting: it requires every revenue provision to have a score (how much revenue it raises or loses) and some tax code simplification ideas are not score-able.

Sen. Ron Wyden, D-Ore., who serves on both the Finance Committee and the Budget Committee, said: “The question is: where you start from … There will be some who’ll say let’s have new taxes, a carbon tax … There will be others who will argue that cutting (tax) rates is going to raise more revenue. But you’ve got to start somewhere.”

NBC News Political Reporter Kasie Hunt contributed to this report.

This story was originally published on Tue Mar 5, 2013 6:26 PM EST

With the sequester deadline in the rear-view mirror, House Democrats are staking out their positions in the next budget battle over keeping the government’s lights on after a March deadline.

Rep. Nita Lowey (D-NY), the top Democrat on the House Appropriations Committee, told reporters Tuesday that she's recommending that her fellow Democrats vote against the GOP-drafted short-term federal budget bill.

Alex Wong / Getty Images file photo

Rep. Nita Lowey (D-N.Y.), the top Democrat on the House Appropriations Committee.

“I'm an optimist,” Lowey said. “I'm hoping that we can end this process with a continuing resolution that makes sense, because Democrats care about reducing the deficit but they don't believe that a sequester is the appropriate way to do it..”

Democrats like Lowey plan to oppose Republicans’ “continuing resolution,” which would fund the government through September 30^th of this year, because it would reduce overall spending due to the across-the-board budget cuts activated by last week’s sequestration order.

They also say that the GOP plan to offer budget flexibility only to defense-related federal agencies is unfair to other programs.

Minority Whip Steny Hoyer, D-Md., who wrangles the Democratic votes in the House, said Tuesday that he is not actively instructing his caucus to vote against the legislation "at this point."

But, with Democratic leaders vocally opposing the GOP measure, it’s clear that it will only pick up a handful of Democratic votes when the bill comes to the House floor this week. (The bill was originally slated for consideration Thursday, but lawmakers now expect to address it earlier due to expected inclement weather. 

The White House said Tuesday that it is "deeply concerned about the impact" of the GOP bill but did not specifically threaten a veto if it passes.

Republicans are confident that they will be able to pass this bill without help from across the aisle, something they've had a problem doing in the past with major bills.

In particular, the conservative bloc of House Republicans seems to accept the CR as being in line with the spending levels that they believe were agreed upon based on the sequester's cuts.

"At the end of the day it's still the number we agreed on, so we're satisfied with that," Rep Tim Huelskamp (R-KS) said. 

Huelskamp added he would like to include some provision related to President Obama's health care law, but said the $982 billion government spending level for the 2013 fiscal year would be considered a "win" for conservatives.

NBC's Carrie Dann contributed to this report.

This story was originally published on Tue Mar 5, 2013 2:47 PM EST

This story was originally published on Tue Mar 5, 2013 1:49 PM EST