House and Senate Approve $3.6 Trillion Budget Plan

The plan includes a deficit of $1.2 trillion

By DAVID ESPO and ANDREW TAYLOR
|  Friday, Apr 3, 2009  |  Updated 11:25 AM PDT
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House and Senate Approve $3.6 Trillion Budget Plan

Associated Press

House Speaker Nancy Pelosi of Calif., center, with from left, House Majority Whip James Clyburn of S.C.; House Majority Leader Steny Hoyer of Md.; House Budget Committee Chairman Rep. John Spratt Jr., D-S.C., and Rep. John Larson, D-Conn., speaks during a news conference on the House budget resolution for the fiscal 2010 federal budget, Thursday.

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WASHINGTON – Acting in quick succession, the House and Senate approved budgets Thursday night drawn to President Barack Obama's specifications and pointing the way toward major legislation later this year on health care, energy and education.

"It's going to take a lot of work to clean up the mess we inherited, and passing this budget is a critical step in the right direction," Senate Majority Leader Harry Reid, D-Nev., said. "Staying true to these priorities will help turn around the economy for the many Americans who are underwater right now."

Republicans in both houses accused Democrats of drafting plans that would hurt the recession-ravaged economy in the long run, rather than help it, and saddle future generations with too much debt.

"The administration's budget simply taxes too much, spends too much and borrows too much at a moment when we can least afford it," said the Senate Republican leader, Mitch McConnell of Kentucky.

But a Republican alternative fared poorly in the House, where 38 GOP lawmakers voted against a plan supported by their own leadership. Officials ascribed much of the opposition to a provision that called for eliminating traditional fee-for-service Medicare for individuals who reach age 65 in 2020 or later and replacing it with coverage from private insurance companies.

On a long day and night, the House was first to vote, and approved its version of the budget on a 233-196 roll call that fell largely along party lines. It calls for spending of $3.6 trillion for the budget year that begins Oct. 1, and includes a deficit of $1.2 trillion.

The Senate acted a few hours later, with Vice President Joe Biden presiding. The vote was 55-43 for a slightly different blueprint that calls for spending $3.5 trillion and forecasts a deficit of $1.2 trillion.

Both deficit forecasts are exceedingly high by historical standards. But they would represent an improvement over this year's projected total of $1.8 trillion, swollen by spending and tax cuts designed to rejuvenate the economy as well as steps to bail out the financial industry.

The day's events capped a busy three months for the Democratic-controlled Congress that took office in January.

Moving with unusual speed, lawmakers have enacted a $787 billion economic stimulus measure, cleared the way for release of $350 billion in financial industry bailout funds, approved an expansion of children's health care and sent Obama legislation setting aside more than 2 million acres in nine states as protected wilderness.

The White House issued a statement hailing the House vote as "another step toward rebuilding our struggling economy."

And while they represented victories for the administration, the budgets merely cleared the way for work later in the year on key presidential priorities — expansion and overhaul of the nation's health care system, creation of a new energy policy and sweeping changes in education.

Major battles lie ahead, particularly over health care and energy. And while Obama made a series of specific proposals to fund his initiatives, congressional budget-writers avoided taking a position on his recommended curtailing of Medicare spending, for example, or imposing hundreds of billions of dollars in new costs on the nation's polluters.

There was no suspense on either side of the Capitol as lawmakers engaged in an annual budget ritual.

In the House, that meant voting first on doomed alternatives drafted by progressives, the Congressional Black Caucus and a splinter group of conservatives. In the Senate, it meant a day of sifting through nonbinding proposals often meant to score political points.

The House plan called for spending $3.6 trillion in the budget year that begins Oct. 1, according to the Congressional Budget Office, compared with $3.5 trillion for the Senate version and $3.6 trillion for Obama's original plan.

The House plan envisioned a deficit of $1.2 trillion for 2010, falling to a projected $598 billion after five years. The comparable Senate estimates were $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.

To reduce the red ink, Democrats pared Obama's proposed spending, ignored his call for another $250 billion in bailout money for the financial industry and assumed that his signature tax cuts of $400 for individuals and $800 for couples would expire in 2011.

The House budget drew opposition from 20 Democrats as well as all 176 Republicans who voted.

In the Senate, only two Democrats voted against the plan, along with all 41 Republicans.

The budget plans do not require Obama's signature, but the House and Senate will have to reconcile the two versions before they can move onto the next phase of the presidential agenda.

"We are not that far apart," said Rep. John Spratt, the South Carolina Democrat who chairs the House Budget Committee.

One difference, seemingly arcane, involved the ground rules to cover work later in the year on health care.

The House budget provides for a "fast-track" procedure that would bar Senate Republicans from attempting to filibuster the legislation Obama wants to remake the nation's health care system. Republicans have warned that the prospects for bipartisanship will all but vanish if majority Democrats attempt to muzzle them.

In a long day of debate in the House, Democratic liberals and Republican conservatives took turns presenting lost-cause alternatives that reflected varying priorities.

The plan advanced by House Republicans, which failed 293-137, would have cut deeply into Obama's recommended spending levels for domestic programs such as education, parks and transportation, while calling for additional tax cuts. Republicans said their alternative would have spent $4.8 trillion less than Obama's budget over 10 years, with significantly lower deficits.

The Medicare proposal would have required anyone currently under 55 to obtain coverage from a private health plan when they turned 65. Their costs would be paid at least in part with government funds. Current Medicare recipients and near-retirees would not have been affected. Supporters said the change would prevent Medicare from going broke.
 

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