Obama-backed budget passes committee

March 26, 2009 2:59:11 PM PDT
Senate Democrats pushed a recession-era budget backed by the Obama administration through committee on Thursday after rejecting Republican attempts to cut spending and reduce mammoth deficits.

The 13-10 vote was along party lines in the Senate Budget Committee, and came as GOP critics sharpened their attacks on a plan that Sen. Jeff Sessions of Alabama derided as "the most irresponsible budget in the history of the Republic."

The plan calls for spending of $3.5 trillion for the year that begins Oct. 1, and assumes a deficit of $1.2 trillion. It includes increases for hundreds of domestic programs and clears the way for major legislation later in the year on President Barack Obama's priorities of health care, energy and education.

Despite their criticism, Senate Republicans have said they do not intend to propose an alternative to the Democrats' budget, a decision that spares them the need to make politically difficult choices.

Republicans conceded that Sen. Kent Conrad, D-N.D., chairman of the committee, had produced a plan that sliced recommended spending beneath levels Obama requested less than a month ago, with lower deficits projected as a result.

But some said he had not gone far enough, while others argued that the budget lacked the type of enforcement measures needed to make sure the targets aren't exceeded in future years.

Sessions' attempt to cut an additional $200 billion from non-defense domestic programs over five years was defeated on a party-line vote, 13-10.

Conrad responded that he already had trimmed spending below Obama's request by $160 billion over five years and had reduced the deficit by two-thirds over the same period. He said Sessions' proposal would have frozen spending in particularly worthy programs like veterans services "at a time when we have large numbers of them returning from Iraq and Afghanistan."

Republicans also failed several times to make it more difficult for Congress to exceed spending limits prescribed for 2011-2014.

Budget debates are often highly partisan in Congress, and the debate occurred one day after Democrats across the Capitol pushed a slightly different budget through the House Budget Committee on a party-line vote.

House Republicans have pledged to present an alternative by next week, and issued an 18-page booklet Thursday that they said would pave the way for economic recovery.

It included few specific proposals, although it called for cuts in domestic programs and new tax reductions for individuals, investors and some businesses.

Both houses will vote next week on the budgets, and the eventual compromise will be prelude to months of struggle in which the Democratic-controlled Congress tries to implement Obama's agenda.

While both the House and Senate budget plans leave room for those bills, they defer difficult decisions until later in the year.

As an example, Obama has proposed creating a special fund to help bear the costs of overhauling the health care system, and suggested tax increases on the wealthy as well as spending cuts to pay for it.

The House and Senate budgets also call for the fund, but make no recommendation on specific tax increases or spending cuts to raise the money.

While Democrats for the most part adhered to Obama's priorities, neither house included the $250 billion that the administration seeks for any future financial industry bailout.

Additionally, Both House and Senate Democrats assume in their version that Obama's $400 tax credit for most workers will expire after 2010, and fail to permanently extend relief from the alternative minimum tax.

The House plan calls for spending $3.6 trillion in the budget year that begins Oct. 1, according to the Congressional Budget Office, compared with $3.7 trillion for Obama's plan. The Senate would spend $3.5 trillion.

The House plan foresees a deficit of $1.2 trillion for 2010 but would cut that to $598 billion after five years. The comparable Senate estimates are $1.2 trillion in 2010 and $508 billion in 2014.

Obama's budget would leave a deficit of $749 billion in five years' time, according to congressional estimates - too high for his Democratic allies - and would grow to unsustainable levels exceeding 5 percent of the economy by the end of the next decade.

--- On the Net: Senate Budget Committee: http://budget.senate.gov House Budget Committee: http://budget.house.gov


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