- The Washington Times - Thursday, March 15, 2007


A Senate panel yesterday approved a budget blueprint that awards near-term spending boosts for Democratic favorites such as education and veterans programs, but postpones difficult decisions on taxes, Social Security and Medicare.

The Senate Budget Committee approved the $2.9 trillion plan by a party-line 12-11 vote over objections from Republicans who insisted plan would guarantee the demise of President Bush’s tax cuts.

The budget plan is nonbinding but lays out Democratic preferences on tax and spending policies. Its most immediate effect would be to award increases to domestic programs while making it difficult for lawmakers to finance tax cuts or to use budget deficit dollars to increase spending on federal benefit programs such as Medicare.

Sen. Charles E. Grassley of Iowa, the senior Republican on the panel, protested that the Democratic plan, written by committee Chairman Kent Conrad, North Dakota Democrat, would produce “the largest tax increase ever.”

Mr. Grassley scoffed at Mr. Conrad’s claims that revenue from closing tax loopholes and better IRS collections could pay for renewal of Mr. Bush’s 2001 and 2003 cuts in taxes on income, married couples, investments and inheritances.

“This budget puts a burden on the [tax-writing] Finance Committee to come up with $916 billion,” Mr. Grassley said yesterday.

While claiming to produce a $132 billion surplus in five years, Mr. Conrad’s budget would increase the deficit from $212 billion in the current 2007 budget year to $249 billion in 2008.

Republicans have dubbed Mr. Conrad’s plan a “Wizard of Oz” budget, saying it produces big increases in federal revenue as if by magic.

“It’s going to take brains, courage and heart,” Mr. Conrad said yesterday.

He took a pass on trying to tackle the long-term fiscal debacle facing Social Security and Medicare, the federal retirement programs that will be swamped by the coming retirement of the baby boom generation.

The annual congressional budget resolution is a nonbinding document that sets guidelines for subsequent legislation. Its most important feature often is to impose a “cap” on the 12 annual spending bills produced by the appropriations committees.

In that regard, the Democratic plan is far more generous to nondefense-appropriated programs — including education, Amtrak, grants to state and local governments and law-enforcement agencies — than is Mr. Bush’s budget plan, rewarding them with an $18 billion increase next year as opposed to the less than $4 billion boost the president recommended.

The move appears to set up a clash this September with Mr. Bush, who has yet to veto a single appropriations bill, but who seems eager to get started.

On the ticklish issue of Medicare, the Democratic plan would pare $15 billion from payments to private insurance companies providing Medicare coverage.

The $15 billion in cuts would be used to increase the number of children in low-income families receiving health insurance through the popular State Children’s Health Insurance Program.

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