President Bush submitted his FY 2006 budget to Congress. It contains a 4.8% increase in funding for Defense and Homeland Security (not including supplemental money for Iraq and Afghanistan) and a 0.7% cut in domestic spending, including $51 billion over five years in entitlement savings and eventual elimination of the Commerce Department’s Advanced Technology Program (ATP), a 57% cut (to $47 million) for the Department’s Manufacturing Extension Partnerships (MEPs).

The House, led by House Budget Committee Chairman Jim Nussle (R-IA), passed (by a 218-214 vote) a GOP FY 2006 budget blueprint that goes beyond the Bush budget in requiring $68 billion over five years in entitlement program savings. The House GOP budget extends $104 billion in expiring tax cuts over five years ($45 billion to be protected from a Senate filibuster under reconciliation rules.

The Senate, led by Budget Committee Chairman Judd Gregg (R-NH), passed (by a 51-49 vote) a vastly different budget blueprint that requires only $17 billion in five year entitlement program savings (an amendment deleting $14 billion in 5 year Medicaid savings was adopted 52-48); contains $6 billion more in FY2006 discretionary spending than the House version; and authorizes a $134 billion five-year tax cut (all of it protected from a Senate filibuster under reconciliation rules), including repeal of the 1993 Clinton-era tax on Social Security benefits. An amendment by Sen. Russ Feingold (D-WI) requiring tax cuts to be “paid for” by additional spending cuts or by tax increases was defeated by a 50-50 vote. The Senate also voted 51-49 to protect oil drilling in Alaska’s ANWR (a key element in the President’s energy plan) from a filibuster.

Differences between the House and Senate Budget blueprints will be resolved in a very difficult joint conference in early April. The principal fight will be over the size and scope of entitlement program savings. Both Houses of Congress must then adopt the final budget conference report. Under Congressional budget rules, specific tax and spending cuts authorized by the budget resolution will be brought to the floors of both chambers later this year and cannot be filibustered in the Senate.