Obama budget on the march through Congress

WASHINGTON (AP) The Budget Committee was poised to approve the blueprint, which is slightly less expensive than Obama's, later in the day.

A companion House panel had already approved its version late Wednesday on a party-line vote.

The plans will go to the House and Senate floors next week over passionate protests from Republicans, who warn of big spending increases and record deficits. Those debates will test Obama's spending increases for domestic programs and the willingness of Democratic moderates to accept record deficits and rapidly growing debt.

But more significant challenges will come later in the year as general agreements on fighting global warming and boosting health care promise to be severely tested as details are penciled in.

Obama, during a first-time virtual town hall meeting at the White House Thursday, defended his budget vigorously, evem as he acknowledged "a lot of critics out there."

"The money we are spending on education, health care and energy, if you add up all that increased money on what we're spending, it's still not driving up our long-term deficits," he said. Obama instead pointed to Medicare and Medicaid and the "Bush tax cuts" and said that "it's going to take us a while to dig out of that problem."

But he also said, "We can't shortchange the investments that will allow us to grow in the future. ... What we can't shortchange are those things that are going to allow us to grow long-term."

Some Democrats are feeling anxiety over the deficit as well, forcing decisions in both houses to cut back big increases in some domestic programs and to drop Obama's signature $400 tax credit for most workers when it expires at the end of 2010.

Both the House and Senate budget plans lack specifics for any of the administration's signature proposals or even clues on how Democrats plan to accomplish goals like raising more than $1 trillion over the next decade to provide universal health coverage.

Curbing global warming is welcomed as a general goal, but both budget panels were careful to avoid endorsing Obama's controversial cap-and-trade system for auctioning pollution permits, which will raise energy costs for consumers and businesses.

Under Congress' arcane budget legislative process, lawmakers devise a nonbinding budget resolution that sets the terms for subsequent legislation. As a practical matter, the budget provides a pot of money to the appropriations panels to fund Cabinet agencies' annual budgets. But it also serves as a way to define party goals.

The House and Senate plans both call for spending less than Obama's $3.7 trillion plan for next year, mostly by ignoring his request for an additional bailout of the financial industry, with additional savings plotted for future years.

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 decade.

Republicans pointed out budgetary sleights of hand in the congressional plans, such as abandoning Obama's promises for permanent relief from the alternative minimum tax and other politically essential legislation, such as funding to shelter doctors from cutbacks in payments they receive for serving Medicare patients.

Senate Budget Committee Chairman Kent Conrad, D-N.D., said Thursday that Democrats are trimming the budget "in a responsible way," not with gimmicks.

In debate Thursday, the Senate panel approved a plan by Sen. John Cornyn, R-Texas, to create a panel to scrub the budget for programs to eliminate. But a plan by Jeff Sessions, R-Ala., to freeze the domestic agency budgets approved by Congress each year seemed certain to go down to defeat.

But Republican Sen. Judd Gregg of New Hampshire, once considered for Commerce secretary by the new administration, accused majority Democrats of doing just that. He said on NBC's "Today" show that Democrats "hid a lot of things."

"I don't think there's any budget gimmickry in saying we expect things (tax cuts) to be paid for," Conrad said on CNN.

In the House, Rep. Paul Ryan, R-Wis., said Democrats were advancing "the president's high-cost, big-government agenda in camouflage. ... Instead of simply righting the ship, this budget steers it in a radically different direction, straight into the tidal wave of spending and debt that is already building."

Each of the two houses' plans envisions substantial increases in core non-defense domestic programs -- $35 billion in the case of the Senate and $42 billion for the House, although both are smaller jumps than the administration's figure of almost $50 billion. Those differences are relatively modest in the context of spending more than $500 billion on the programs involved, and congressional appropriators say the increases over current levels are smaller than they seem due to several complicating factors, like extra spending for the decennial Census.

On taxes, the Democrats followed Obama's lead in agreeing to extend many of the Bush-era tax cuts that were enacted in 2001 and 2003. An exception was made in the case of cuts that applied to upper-income wage earners.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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