House Passes Bush's 2007 Budget

House GOP leaders had to further dilute President Bush's austere 2007 budget plan in order to push it past the finish line early Thursday.

It long ago had been shorn of Bush initiatives such as curbs on Medicare spending or new incentives for health savings accounts. But conservative GOP House leaders had to make further concessions to mollify party moderates in order to win a 218-210 vote around 1 a.m. EDT.

Moderates won promises for modest increases in spending on education, health and other social programs, though it's not certain voters will see them before the November elections.

For GOP leaders, passage of the $2.8 trillion Republican plan avoided the embarrassment of not being able to pass the budget blueprint through the House for the first time since legislative budget rules were put in place in 1975.

It's improbable, however, that the House and Senate will be able to agree on a mutual budget plan for the fiscal year beginning Oct. 1. Differences simply appear too steep between House conservatives determined to stick with Bush's caps on agency budgets funded each year and Senate GOP moderates determined to breach them.

The annual congressional budget resolution is a nonbinding blueprint that sets the broad parameters for upcoming tax and spending bills. This year, with no ambitious new tax cuts or benefit curbs on the GOP agenda, the budget serves chiefly to set an overall limit on the 11 upcoming appropriations bills.

There are other ways to facilitate consideration of appropriations bills. The first order of business for the House Thursday was to vote to "deem" the budget to be in place — even though there's no agreement with the Senate — as the House takes up the first of the 11 appropriations bills, a measure funding the Interior Department.

For House Republicans, their budget plan steers a steady path limiting the growth of spending while assuming $228 billion in additional tax cuts over five years, much of which would go toward extending GOP tax cuts scheduled to expire in 2010.

The House vote came hours after Bush signed a deficit-financed $70 billion tax cut bill extending lower rates for investors and saving billions of dollars for families with above-average incomes threatened by the alternative minimum tax.

Republicans credited existing tax cuts for a booming economy and said surging revenues were driving current-year deficit estimates perhaps $100 billion below the record $423 billion in red ink predicted by the White House in February.

Majority Leader John Boehner, R-Ohio, said the GOP budget blueprint "strengthens our efforts to control spending and, coupled with a robust economy fueled by tax relief, is making real progress in driving down the deficit."

Democrats countered that the House GOP plan calls for a $653 billion increase in the national debt to $9.6 trillion and that the deficits produced by the plan are likely to be far larger than the $1.1 trillion that Republicans assume will accumulate under the measure if its policies are followed.

That's because the measure doesn't take into account the long-term costs of the war in Iraq or of shielding middle-to-upper income taxpayers from the alternative minimum tax. And many of the long-term spending cuts assumed by the GOP plan are politically unsustainable since they come from already squeezed domestic agency budgets.

"This budget resolution is a continuation of the most reckless fiscal policies in the history of our nation, policies that have squandered a $5.6 trillion budget surplus, added more than $3 trillion to the national debt, and weakened our ability to respond to national and international crises," House Minority Whip Steny Hoyer, D-Md., said.

Republicans voted down a Democratic alternative that contained more funding for popular domestic programs such as education, veterans health care and health research while balancing the budget by 2012 — but only by allowing hundreds of billions of dollars in GOP-passed tax cuts to expire.

This year's budget plan, developed by the House Budget Committee and House GOP leaders, reflects election-year realities and drops Bush's proposed cuts to Medicare, Medicaid, crop subsidies and other politically sensitive programs.

The plan endorses Bush's proposed 7 percent increase in the core defense budget — which doesn't include Iraq war costs — for next year.

The Republican plan also assumes just $50 billion for the wars in Afghanistan and Iraq, less than half of expected spending for the current year.

While the House GOP plan drops $65 billion in benefit cuts over five years proposed by Bush's budget, it goes further than Bush in attacking appropriated spending, the approximately one-third of the budget passed by Congress each year.

It would cut federal spending on education by more than $5 billion, about 7 percent. And after allowing for an increase next year, it would cut the politically sensitive budget for veterans medical care below current levels through the rest of the decade.

The official deadline for Congress to wrap up the budget outline came and went a month ago, but divisions among House Republicans have kept party leaders from bringing the House version of the measure to a vote.

Led by Rep. Michael Castle of Delaware, Republican moderates had refused to supply votes for the measure until GOP leaders promised to increase the budget for social programs.

On Wednesday, however, Castle won a promise from Boehner for a 5 percent, or $7 billion, increase over Bush's $138 billion request for a popular measure funding the departments of Labor, Health and Human Services and Education.