House GOP Bats Down Dem Budget Resolution

The House on Thursday rejected a Democratic effort to impose restrictions on new tax cuts as it neared passage of a $2.41 trillion budget that largely tracks President Bush's fiscal wish-list.

By 222-201, the Republican-run chamber swatted down a Democratic attempt to derail the GOP-written budget for fiscal 2005, which starts Oct. 1. Democrats wanted to replace it with an alternative that would bar tax cuts or higher spending for benefits like Medicare (search) unless the costs were paid for with other budget savings.

"The leadership of the Republican Party has turned the balanced budget into record deficit spending," said Rep. Martin Frost, D-Texas, noting the four-year string of annual surpluses just before Bush took office. "Republicans are throwing trillions of dollars around like it's pocket change."

Republicans defended their plan. They said making it harder for Congress to extend soon-to-expire tax cuts by forcing lawmakers to find savings would be the wrong medicine for the now-growing economy.

"Raising taxes would stop this growth dead within its tracks," said Rep. Doc Hastings, R-Wash.

Though largely following Bush's goals, the House plan reflects the political peril that this year's expected $500 billion shortfall could pose for the GOP. It would do so by shrinking Bush's proposed tax cut, tightening domestic spending and claiming to halve deficits in four years, sooner than Bush's five.

But Democrats noted the House budget still claims a $377 billion deficit this year and nearly $1.4 trillion in cumulative deficits through 2009. And it doesn't project out for the following five years, when shortfalls are expected to worsen because baby boomers will begin retiring and the costs of Bush's past tax cuts will mount.

Democrats were offering three alternatives of their own, drawn by party leaders, conservatives and members of the Congressional Black Caucus (search). All would cancel already enacted tax cuts on the wealthiest Americans and use the savings to pay off some of the deficit and increase spending for veterans, schools and other programs.

GOP conservatives also had their own budget, which touted deeper spending cuts and faster deficit reduction than the main Republican plan.

The conservatives also would include the full $183 billion in five-year tax cuts that Bush is seeking - $45 billion more than the budget written by GOP leaders. Both plans, however, ignore Bush's call for $1.3 trillion in tax cuts over the next decade, mostly to extend parts of the 2001 and 2003 tax bills that will otherwise expire.

Republicans were faced with some internal opposition from lawmakers who wanted added funds for veterans and from those who favor a mechanism making it harder for Congress to approve new tax cuts. Others were upset the budget did not call for equal pay raises next year for military personnel and civilian federal workers.

But GOP lawmakers and aides expressed confidence that they would have enough votes to approve the budget.

The House fiscal plan calls for:

-$418 billion for defense, about what Bush requested and 7 percent more than this year, not counting the extra money spent for the war in Iraq and Afghanistan (search).

-An additional $50 billion for next year's expected costs of continuing those wars. The White House says it won't request the fund until after the November elections.

-Spending $33 billion for anti-terrorism efforts (search) at home, 0.5 percent less than Bush's request and 10 percent over this year.

-$369 billion for domestic programs, the same as this year and $1.3 billion below Bush's proposal.

-$13 billion in savings over the next five years from vaguely described benefit programs that may include Medicaid, welfare (search), civil servants' benefits, and the earned income tax credit for low-income workers.

House approval would set up negotiations with the Republican-dominated Senate, which approved a similar budget two weeks ago.

Those talks are expected to be difficult, chiefly because the Senate version — over the opposition of its own Republican leaders — included a requirement that budget savings be used to cover new tax cuts and expansions of benefit programs.

Bush and GOP leaders want those strictures to apply only to spending increases, not tax cuts. The House budget includes no such restrictions, but a separate bill the chamber may vote on this spring would impose the requirement only on increased benefits.