Budget Resolution Chance for Deficit Reduction

The Senate's top budget writer wants to cut deficits (search) faster and curb spending more than President Bush has proposed, but is not ready for the magnitude of tax cuts the White House wants.

Senate Budget Committee (search) Chairman Don Nickles, R-Okla., planned to give his panel on Wednesday a $2.4 trillion fiscal blueprint for 2005, with hopes of gaining their approval the following day.

"I hope and expect to be supported by a majority" on the panel, Nickles said.

It is Congress' first step in reshaping the election-year spending plan that Bush introduced last month. The House Budget Committee plans to vote on a similar package next week.

With this year's deficit expected to reach the half-trillion dollar range - easily a record in dollar terms - most Republicans want to make the budget more conservative than Bush proposed. But when the plan reaches the full Senate next week, enough moderate Republicans leery of paring spending in a campaign year could join opposition Democrats and put the plan's fate in doubt.

"The tension is money. There isn't enough," said Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, whose panel writes spending bills.

The Senate and House budgets also will depart from Bush's plan by indicating how much they think it will cost for U.S. military operations in Iraq next year.

Arguing that costs are unpredictable, Bush's budget omitted any funds for Iraq, but his aides said they would request up to $50 billion - after the November elections.

The Senate plan will assume $30 billion, said a Senate GOP aide who spoke on condition of anonymity. House Budget Committee Chairman Jim Nussle, R-Iowa, said he would include up to $50 billion.

The emerging congressional proposals reflect that many Republicans believe Bush's budget does not aggressively restrain spending or cut the deficit enough, and could be vulnerable to Democrats' criticism that it lacked credibility.

Nickles' plan would cut this year's deficit in half in three years, said a Senate Republican aide. Nussle said his budget would "come close to, if not fully cutting the deficit in half" in four years, going "further and faster than the president."

The nonpartisan Congressional Budget Office (search) projects this year's deficit will hit $478 billion, easily exceeding last year's $374 billion, a record in dollar terms. Using differing assumptions about how the economy will behave, Bush has estimated that this year's shortfall will be $521 billion.

Aides said the Senate plan also will propose:

-$814 billion for the one-third of the budget that covers defense, domestic security and most domestic programs, excluding automatically paid benefits like Social Security. To reach that figure - $9 billion below Bush - Nickles will propose trimming the president's plan by $7 billion for defense and $2 billion for domestic programs, effectively holding non-defense, non-domestic security spending to this year's total.

-Modest savings from benefit programs. Nickles is expected to target customs fees and what he considers overpayments in Medicaid and earned income tax credits for poor working families.

-$144 billion in tax cuts over five years. Bush proposed 10-year tax cuts totaling $1.3 trillion, but Republicans wary of making long-range deficit projections even worse decided long ago not to pursue them this year.

Of the Senate total for tax reductions, $80 billion would be given procedural protection from filibusters, or Senate delays, that take 60 votes to overcome.

Protected proposals would keep the children's tax credit, tax breaks for married couples and the expanded 10 percent tax bracket from shrinking, as current law otherwise will require. The Nickles plan also will call for moving up abolition of the estate tax by one year, to 2009.