Bush Tax Cuts Pass House Test Vote Along With Budget Outline

The House Tuesday gave solid but nonbinding endorsement to a variety of President Bush's tax cuts as Democrats sought adoption of a compromise $2.9 trillion budget plan for next year.

By a 364-57 vote, the House agreed to support $180 billion in tax cuts for 2011-12, enough to cover the extension of tax relief for married couples, people with children and people inheriting large estates.

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The vote came on a GOP procedural motion as the House officially named negotiators to a House-Senate panel that is expected to hammer out a congressional budget plan for the fiscal year beginning Oct. 1.

The underlying Democratic budget blueprint is also nonbinding, but sets the outlines for subsequent legislation such as the 12 annual appropriations bills expected to begin reaching the House and Senate floors later this month.

Most of President Bush's signature tax cuts, enacted in 2001 and 2003, expire at the end of 2010. A quirk in Senate rules forced the expiration date, and a central question facing Congress is which ones to extend before the deadline.

Republicans said the Democratic budget, by failing to account for renewing Bush's tax cuts, amounts to an endorsement of a huge tax increase.

Still, Republican-controlled Congresses never scheduled votes on renewing the full menu of GOP tax cuts — despite annual calls from Bush to do so. It's commonly conceded that decisions on extending the tax cuts won't be made until after the next election, closer to their expiration date.

In addition to the middle-class tax cuts favored in Tuesday's vote, the Bush tax bills cut rates on incomes, dividends and capital gains, among other provisions.

Many Democrats argue the Bush tax cuts are tilted too much in favor of the wealthy and that the U.S. budget picture has deteriorated significantly since their enactment. Republicans credit cuts in taxes on incomes and investments with strong economic growth since the early part of the decade.

The underlying budget plan sets goals for subsequent tax and spending legislation, but lawmakers are not bound to it. It does, however, make a statement about the priorities of majority Democrats and provides an early test of the party's ability to prove it can govern.

Another test comes as Democrats fashion 12 spending bills totaling more than $950 billion for the 2008 Pentagon, foreign aid and domestic agency budgets. Democrats have agreed to accept Bush's requests for the wars in Iraq and Afghanistan and an approximately $50 billion increase in the Pentagon's core budget.

But an approximately 5 percent, $23 billion increase for domestic agency budgets promises a series of veto clashes with President Bush later this year.