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House passage of budget sets up clash with Senate

Friday, March 26, 2004

WASHINGTON -- Republicans muscled a $2.41 trillion budget through the House on Thursday that sets up a clash over a Senate-passed plan to make it harder for Congress to approve President Bush's tax cuts.

The House measure largely embraces Bush's budget proposal, but recasts it in acknowledgment of record federal deficits that Republicans worry may haunt them in November's elections. The GOP plan pinches Bush's tax reductions and spending proposals and accelerates his goal of halving deficits in five years.

But taking a stand for a Republican priority, the House budget ignores efforts by Democrats and moderate GOP lawmakers to make it harder for Congress to enact future tax cuts without paying for them. The Senate included such a plan in the budget it approved two weeks ago, over the opposition of the White House and its own Republican leadership.

After overcoming disaffection by some GOP deficit hawks and veterans advocates, majority Republicans pushed their fiscal outline for 2005 through the House by a mostly party-line vote of 215-212. Ten Republicans joined every voting Democrat in voting no.

Bush congratulated the House for approving a "responsible" budget he said would buttress defense, anti-terrorism and the economy. He said in a written statement that Congress should quickly approve a compromise plan "based on my principles of funding what's necessary to protect America and keep our economy growing, while restraining spending elsewhere."

Republicans said the public wants government to spend federal dollars more wisely without turning to tax increases.

"We're going nowhere but up," said House Budget Committee Chairman Jim Nussle, the plan's main author, who cited the rapid economic growth of recent months. "Quit blaming tax cuts for all the problems in the world," said Nussle, R-Iowa.

Democrats chastised the GOP for repeatedly pushing tax cuts through Congress even as the four-year string of annual surpluses that preceded Bush's presidency evolved into record deficits now approaching $500 billion.

For Democrats, that budget gap has become a political surrogate for the lack of jobs afflicting the U.S. economy.

"If the current plan we've been under for three years is such a huge success, why are we broke?" said Rep. Marion Berry, D-Ark. "Why are there no jobs? Why are we going deeper and deeper in debt?"

Earlier, the House rejected three Democratic alternatives that would have erased already enacted tax cuts for the richest Americans and plowed the money into deficit reduction and programs for schools, veterans' health care and others.

A budget by the Congressional Black Caucus was defeated 302-119; one by conservative Democrats lost 243-183. A proposal by Democratic leaders that claimed to reach balance by 2012 fell short by 232-194.

Also turned aside 309-116 was a plan by conservative Republicans that mapped sharper spending cuts and quicker deficit reduction than the main GOP plan.

Congress' budget does not become law, but sets limits on tax and spending bills to follow.

Its enactment also provides procedural protections that could make it easier for the Senate to approve tax cuts this year and for the House to avoid a direct vote on a needed -- but politically embarrassing for Republicans -- increase in the government's $7.4 trillion debt limit.

The budget the Senate approved earlier this month requires future tax cuts or benefit expansions to be paid for with tax increases or spending cuts.

House leaders, adamant about protecting future tax reductions, omitted similar language from their budget, angering deficit-hawk Republicans who want to at least limit expenditures. House Speaker Dennis Hastert, R-Ill., said he promised supporters of the restrictions a vote this spring, though it was unclear exactly how sweeping the measure would be.

It was uncertain, too, if that would clear the way for approval of a compromise budget by the Senate, where some GOP moderates have insisted on constricting new tax cuts.

Some Republicans also complained that the budget lacked enough money for veterans. It proposes $30.7 billion for veterans' services, mostly for health care. That is $1.2 billion more than Bush proposed but short of what some lawmakers wanted by an additional $1.2 billion.

Underscoring the growing Republican concern over the political price they may pay for deficits, the House plan claims to cut this year's projected $477 billion deficit in half by 2008, a year earlier than Bush claimed to do the same.

Even so, the smallest deficit over the budget's five-year projections would be $234 billion. Like the similar plans by Bush and the Senate, much of the reductions come not from specific budget savings but from assuming that a growing economy will produce more federal revenue.

The House plan pares Bush's proposed $181 billion in five-year tax cuts to $138 billion, but ignores his call to make permanent tax reductions expiring at the end of the decade. It also slices 0.5 percent off his planned 10 percent boost for anti-terrorism programs at home.

It fully matches Bush's $421 billion request for the military -- $418 billion directly for defense and $3 billion for defense-related expenses by various agencies. It holds domestic agencies to $369 billion, the same as last year and $1.3 billion less than Bush sought.

It proposes $13 billion in five-year savings from benefit programs that could include Medicaid. While that is a relatively small figure, it puts Republicans in the position of advocating savings from politically sensitive programs.


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