House approves $2.9 trillion budget

WASHINGTON Thu Mar 29, 2007 4:23pm EDT

The dome of the Capitol building in a file photo. The House of Representatives approved a $2.9 trillion budget that Democrats said imposes fiscal discipline on the federal government and that Republican opponents said will lead to huge tax increases. REUTERS/Jim Bourg

The dome of the Capitol building in a file photo. The House of Representatives approved a $2.9 trillion budget that Democrats said imposes fiscal discipline on the federal government and that Republican opponents said will lead to huge tax increases.

Credit: Reuters/Jim Bourg

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WASHINGTON (Reuters) - The U.S. House of Representatives approved a $2.9 trillion budget that Democrats said imposes fiscal discipline on the federal government and that Republican opponents said will lead to huge tax increases.

The House passed the fiscal 2008 budget on a largely party-line vote of 216-210. The nonbinding resolution would spend more money on health and education and other domestic spending programs that Democrats said have been ignored under six years of Republican control of Congress.

The budget sets spending and revenue goals, but it will be up to individual committees to act on specific legislation. The Senate has approved its version of the budget and the two chambers now have to work out their differences.

House Budget Committee Chairman John Spratt, a South Carolina Democrat, said the spending blueprint for the fiscal year that begins October 1 sets the course for turning huge deficits over the last several years into a slight surplus by 2012.

Democrats criticized past Republican budgets and sought to deflect criticisms that their budget would raise taxes. "We have to return to fiscal sanity, we created a mess in the last six years," said Rep. Allen Boyd, a centrist Florida Democrat.

The budget also provides for temporary relief from the alternative minimum tax for about 20 million taxpayers. The tax was originally intended for only the wealthiest but would hit millions of middle-class taxpayers without congressional action.

Republican opponents called it a blueprint "for the largest tax increase in history," because the budget does not extend President George W. Bush's tax cuts, which are set to expire in 2010.

ENTITLEMENT SPENDING

They also argued that the Democratic budget does little to slow the growth of spending for Medicare and other entitlement programs not subject to the annual appropriations process.

"They propose to control no spending. They propose to cut nothing," Rep. Paul Ryan of Wisconsin, the top Republican on the House Budget Committee, said of the Democratic budget.

A Republican alternative that was rejected by the House would have cut $279 billion in entitlement spending over five years mostly by slowing the growth of Medicare and Medicaid health programs for the elderly and poor.

Democrats said Republican policies have added to the U.S. national debt, which stood at $5.7 trillion when Bush took office and now totals $8.8 trillion. The budget would automatically raise the nation's borrowing authority to nearly $9.5 trillion from a current $8.9 trillion credit limit.

Democrats said their budget contains no tax increases, tackles wasteful spending and gives priority to extending popular middle-class tax breaks such as the $1,000 child tax credit.

Republicans argued that Bush's tax cuts have helped boost U.S. economic growth and should be extended.

The House budget would spend about $22 billion more than Bush for discretionary programs subject to the annual appropriations process.

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