The U.S. Senate passed the Budget Control Act of 2011 on Tuesday, after the bill was approved Monday by the Republican-controlled House of Representatives.

Forty-five Democrats, 28 Republicans and independent Sen. Joe Lieberman voted in favor of the bill. Nineteen Republicans, 6 Democrats and independent Sen. Bernie Sanders voted against the bill.

Among those Democrats voting against the bill were Sens. Kirsten Gillibrand (N.Y.), Bob Menendez (N.J.) and Ben Nelson (Neb.), all up for re-election in 2012 (Sanders, who caucuses with Democrats, is also up for re-election). Menendez said Monday that “I cannot in good conscience support a plan where soldiers, seniors, students, and working families must endure trillions in cuts, while oil companies, billionaires, and corporate jet owners are not asked to pay their fair share.”

Sen. Dean Heller (R-Nev.) and Sen. Orrin Hatch (R-Utah) were the Republicans up for re-election in 2012 who voted against the bill. Hatch, who could be facing a primary challenge from a more tea party-friendly candidate, said on the Senate floor Tuesday that he rejected the bill because it did not sufficiently cut spending.

Two members of the “Gang of Six,” a bipartisan group of senators that proposed their own $3.7 trillion deficit reduction package containing both spending cuts and revenue increases, voted against the final bill: Tom Coburn (R-Okla.) and Saxby Chambliss (R-Ga.).

In a statement after the vote, President Barack Obama said that the bill was an important first step, but that revenue increases for further deficit reduction are necessary. He also said that he would seek a jobs bill after Congress returns from their upcoming August recess.

Stephanopoulos asked Huntsman to expand on his perspective of domestic spending policy, specifically inquiring whether he regrets calling the president’s 2009 stimulus package insufficient.

George Stephanopoulos: Let’s talk some domestic issues. A lot of Republicans — again, Republican primary voters —  are going to wonder about your decision as governor of Utah to take the stimulus funds, President Obama’s stimulus funds. And when you were asked about it, you suggested that one of the problems with the stimulus is that it wasn’t big enough. Is that what you still believe?

Jon Huntsman: If you read on in that interview, you will find that I was specifically referring to corporate tax cuts, payroll tax deductions, and focusing the stimulus in infrastructure projects that would improve our economic future.

George Stephanopoulos:But you also aligned yourself with Mark Zandi, who said the stimulus … had to be about a trillion dollars.

Jon Huntsman: That was his take. And my take was, let’s stimulate business. Let’s look at tax cuts, let’s look at payroll tax deductions. If you read on in the interview, that’s exactly what I said. But more than that, George, a specific focus as opposed to just giving dollars to states. And let’s face it, every governor took it.

The interview in question is this Politico Q&A session with the then-Utah Gov. Huntsman during a National Governors Association meeting:

Q: How long before you see the stimulus money kick in?

A: I’m not sure it’s the stimulus money that will necessarily allow the economy to recover…It will help to fortify our budgets, frankly, to ensure that there isn’t as much backsliding in the areas of education and healthcare, for example. But economic recovery must be earned. And it will be earned by entrepreneurs and it will be earned by small businesses.

Q: You said the stimulus wasn’t large enough. In addition to the tax cuts that you mentioned, are there other measures you would have liked to see included in the bill?

A: Well, the size of about a trillion dollars was floated by Mark Zandi, who’s a very respected economist. I tend to believe what he is saying about the size of the package, which didn’t necessarily hit the mark in terms of size.

Q: How realistic is President Obama’s expected pledge to cut the deficit in half?

A: You can slice it any number of ways. The question becomes, how deleterious are these budget-balancing measures to our long-term competitiveness? And I think we have to be very sensitive to our need to compete, moving forward, and a lot of that is tied to tax policy.

At the end of the day, capital is a coward. It’s going to flee from wherever it perceives risk to be present in the marketplace…In a day and age of global competition and instantaneous financial flows, you have to be highly sensitive to the way in which tax policy impacts your overall competitiveness as a country. That’s the only flag of caution I think we ought to be waving at this point.

Without too much extrapolation, Huntsman’s views on spending in 2009 put an emphasis on funding social welfare provisions and borrowing money for tax relief and public projects that would counter the effects of the recession. He seems to imply drastic balancing measures can have a negative impact on overall economic demand. The language he uses in the 2009 interview appear less equivocal on the issue of deficit spending than the statements he provided during Thursday’s programming.

Huntsman, most recently the U.S. ambassador to China, backpedals more noticeably from his 2009 position by throwing his support behind the Paul Ryan budget plan, telling Stephanopoulos he would have voted for the Wisconsin representative’s spending reduction bill that, among other things, would privatize Medicare and increase military spending. Support for the congressman’s extreme cuts runs counter to Huntsman’s 2009 wish to provide states stopgap funds. Moreover, in light of his being in favor of pulling out of Libya and Afghanistan, backing a budget plan that allocates more dollars to defense spending is counterintuitive.

Huntsman refused to change his qualified support for civil unions, nor would he change his position on immigration, telling the GM host, “And I don’t believe in penalizing the younger generation coming across our borders who have no say whatsoever over their journey and destiny. They want to integrate into the American system. If they’re willing what needs to do be done and work hard, then I think if we’re giving them an in-house tuition break, that integrates them into the system, and makes them part of ultimately contributing to our country.”

A new American Express study found [the] consumers boosted their fast-food spending by 24% in the second quarter, compared with the year-earlier period, while fast-food spending among the rest of U.S. consumers rose 8%.

Wealthy consumers increased their spending on fine dining, too, but not by as much, suggesting that although the economy has shown signs of improvement, the wealthy are trying to hold down costs in certain areas.

“We’re seeing a bifurcated behavior pattern, with a lot of affluent consumers still trying to be frugal where they can by spending at quick-service restaurants and discount retailers, but we’re also seeing a return to higher-end spending on air travel and luxury items,” said Ed Jay, senior vice president of American Express Business Insights, which studied spending patterns among its cardholders. [...]

The ultra-affluent increased their spending on business-class plane tickets by 114% in the second quarter, compared with a year earlier. Rich consumers also boosted spending on cruises, car rentals and luxury hotels. They spent 12% more on fine dining.

And the story has this graph to go along.

The graph shows it isn’t just the ultra-rich doing this — it is regular folks, too. You can see in the yellow bars that average customers are spending a bit more on expensive food, taking away spending from moderately priced food, and adding spending to cheap food. In fact, businesses expect this skew. Spending on high-end products has taken a nosedive in the recession, but has started to come back. Places like Olive Garden, though, still aren’t expecting customers to come flocking in. But McDonald’s? Doing great.

“At a time when small business owners are still struggling to make payroll and they’re still holding off hiring, we put together a plan that would give them some tax relief and make it easier for them to take out loans,” President Obama said, speaking about the bill this week.

Republicans had held the relatively noncontroversial legislation up since July — demanding to propose non-germane amendments, then refusing the closure of a tax loophole for large companies as a pay-for. More recently, Republicans argued that the tax cuts in the bill weren’t big enough. Ultimately, Sens. George Voinovich (Ohio) and George LeMieux (Fla.) crossed the aisle.

The bill passed 61 to 38, and now goes onto the House, which approved similar legislation in June and is expected to pass the bill within the next few working days.

[W]hile harping on the deficit is easy when the other party is running up the bills, it’s a lot tougher when the country’s checkbook rests in your hands — and with the GOP poised to potentially retake Congress, that time may be approaching.

For some in the Tea Party movement, the standard they plan to judge the party’s progress by is sky high. A spokesman for Rand Paul, the Tea Party-backed Senate candidate in Kentucky, said Paul “will vote against and filibuster any unbalanced budget proposal in the Senate.”

Making the task of reducing the deficit even tougher, Republican lawmakers are pushing to extend $678 billion of Bush-era tax cuts for high-income earners, and many conservative activists are calling for further tax breaks as well. Paul is already warning conservatives not to be fooled if Republicans opt only for the more popular tax cuts while punting on the spending side.

“We as Republicans have taken the easy way out a lot of times,” Paul wrote in a recent Facebook post. “We vote to cut taxes but we don’t ever vote to cut any spending. Because as soon as you do, as soon as you bring up a program, it’s somebody’s program and they love it.”

Other Tea Party leaders are using similar benchmarks to judge the next Congress. “I personally think a balanced budget is imperative and I think there’s tremendous support for a balanced budget,” said Mark Meckler, a spokesman for the Tea Party Patriots. Lawmakers who vote for anything less will “see a lot of frustration out there in the electorate if they do that.”

During the Bush years, Republicans routinely passed unbalanced budgets (or passed no budget at all, but planned an unbalanced fiscal year), choosing not to offset the cost of the Bush tax cut or the two wars.

Obama said that he and Congressional leaders will find a way to make the measures deficit-neutral. But where will the $300 billion come from? In The Washington Post, Anne Kornblut and Lori Montgomery write: “It would be paid for by closing other corporate tax loopholes, said the official, speaking on condition of anonymity because the policy has not yet been unveiled.”

But closing loopholes on big, multinational corporations will pose a number of problems. First of all, finding $300 billion in tax increases itself will pose a challenge — many of the easy fixes are already gone, used to fund other priorities. Then, even if Democrats find a way to make the bill deficit-neutral, groups like the Chamber of Commerce might decide to object to it, and might lobby against it, since it raises taxes on big businesses. So too might moderate Senate Republicans, who have objected to the small-business bill largely on the grounds that it raises taxes for a small number of companies. Moreover, Republicans will likely oppose the proposal for just shifting the tax burden around — I can imagine Republicans arguing that the bill does nothing other than pick winners and losers.

Indeed, Republicans have already opposed Obama’s proposal. Senate Minority Leader Mitch McConnell (Ky.), for one, released this statement: “After the administration pledged that a trillion dollars in borrowed stimulus money would create 4 million jobs and keep the unemployment rate under 8 percent, their latest plan for another stimulus should be met with justifiable skepticism. After failing to deliver on their economic promises for more than 18 months, the administration wants to do it again — this time with higher taxes for even more new spending.

“Americans are rightly skeptical about Washington Democrats asking for more of their money — and their patience; after all, they’re still looking for the ‘shovel-ready’ jobs they were promised more than a year ago. A last-minute, cobbled-together stimulus bill with more than $50 billion in new tax hikes will not reverse the complete lack of confidence Americans have in Washington Democrats’ ability to help this economy.”

Essentially, though, all three numbers remain steady and poor, with improvements marginal since the beginning of the year. The recovery? You might have heard it has stalled out.

The funding comes amid the leak of tens of thousands of classified military documents casting doubt on the Obama administration’s Afghanistan strategy, showing Pakistan in support of the Taliban and describing problems with the civilian surge. President Obama told reporters yesterday, “While I’m concerned about the disclosure of sensitive information from the battlefield that could potentially jeopardize individuals or operations, the fact is these documents don’t reveal any issues that haven’t already informed our public debate on Afghanistan.” But the leak has left many on the Hill wondering just what that $59 billion will do. Anti-war members Dennis Kucinich (D-Ohio) and Ron Paul (R-Texas) called again for returning military personnel from Pakistan.

The war funding comes none too soon for the Pentagon, which expected the money in May or June and said it might have to curtail troops’ salaries if the funds did not materialize. The funds will keep 30,000 additional troops in Afghanistan until December.

A prior House version of the bill contained billions in domestic spending — including $10 billion for states to keep teachers employed, $1 billion for summer jobs programs and $700 million for U.S.-Mexico border security. The version of the bill now due to become law includes emergency funds for Haiti, but no domestic spending.

George W. Bush found a way to split the difference: He lowered taxes while spending more on services (the Medicare prescription drug benefit, the transportation bill, agricultural subsidy increases) than ever before. David Leonhardt of The New York Times reports that taxes as a percentage of GDP fell from 21 to 18 percent of GDP between 2001 and 2008 and to 15.1 percent in 2009 — partly because of two recessions and partly because of Bush’s tax cuts — while spending increased dramatically.

But only 10 percent of $2 trillion swing into deficit is due to Obama policies; the rest, about 53 percent of the new deficit, is attributed to Bush’s tax cuts and spending increases (including the extensions. Nonetheless, by 2020, spending will equal 26 percent of GDP because of Social Security — that Bush promised to but never did reform — and Medicare — to which he added benefits — while taxes will bring in only 19 percent of GDP.

Fiscally conservative Republicans often pursue economically detrimental tax cuts under the theory that they can “starve the beast” of government spending; yet, while in office, Republicans often give into pressure to continue popular government programs while still cutting taxes. Does anyone really imagine that, were the Republicans in charge of the Senate, Paul Ryan’s push to eliminate Medicare (that is, health insurance for the elderly) for everyone born after 1955 would actually be on the table?

Obama’s deficit reduction commission is expected to release some politically palatable ways to reduce the deficit through cuts to spending programs and increases in taxes, but what is politically palatable to most people? Leonhardt suggests that Social Security become means tested, meaning that some wealthy people would pay into the system but get little or nothing in return, and that its annual cost-of-living adjustment be more of a realistic (i.e., lower) calculation of the cost of living. Neither of those ideas will get particularly far with the nation’s elderly. He also suggests eliminating some corporate and agricultural subsidies, reversing 25 years of legislative movement in the other direction. And he suggests adding a consumption (also known as a VAT) tax or reducing some major tax loopholes, like the mortgage interest deduction that subsidizes home ownership. That these are the ideas that are considered remotely politically palatable shows how far even Republicans have come from the days that they believed starving the beast would win them elections. Nowadays, most Republicans politicians are in favor of using borrowed funds to feed the beast fois gras.

A case in point is scandal-plagued Nevada governor Jim Gibbons, who plans to use his state’s budget deficit to “reinvent” Nevada’s already-meager government.

“We may never have an opportunity like this again,” he said.

The opportunity presenting itself to Gibbons is to slash services in the state. On the chopping block: a college scholarship reserve fund; state workers’ salaries; elementary and secondary education; Medicaid coverage for glasses, hearing aids and dental care; and day care programs for disabled adults. Oh, and he might eliminate some tax deductions for mining companies, which would amount to 25 percent of the cuts in Nevada children’s educational programs.

Anti-tax Republicans often push for tax cuts without concomitant service cuts because cuts in services are far less politically popular, particularly in the good economic times that encourage politicians to enact tax cuts. But it’s not that they are bad at math; they instead just believe that they can “starve the beast” of government by limiting its access to funds. Never mind that “starving the beast” rarely works even when Republicans control the government and that often even Republican governments will actually raise taxes rather than cut needed services — anti-tax Republicans will continue to advocate that cutting taxes is just the first step to cutting unnecessary spending.

Of course, what a relatively wealthy Republican considers “unnecessary” spending should give many Americans pause. As Glenn Greenwald pointed out this weekend, Republicans are more than happy to preside over the largest expansion of government since World War II if it involves wars or government surveillance. But, as Gibbons proves, they’ll pare down dental care for people who can’t afford health insurance, they’ll “starve the beast” of public education and they’ll make sure low-income people with hearing impairments can’t get hearing aids on the government dime (even if those hearing aids can help them get a job). And then they’ll celebrate the “opportunity” to “reinvent” government.