Democrats set to move balanced budget plan

By Richard Cowan

WASHINGTON (Reuters) - Democrats in Congress will try to pass a fiscal 2009 budget blueprint this month that, like President George W. Bush's proposal, claims to erase government budget deficits by 2012 but rejects many of the domestic spending cuts sought by the White House this year.

House and Senate budget panels begin drafting their proposals on Wednesday, for the fiscal year that begins October 1, with the goal of sending them to the full House of Representatives and Senate next week, where close votes are expected.

In touting a balanced budget amid huge deficit spending throughout Bush's two terms, both the White House and Democrats are not counting a huge expenditure -- the Iraq war -- beyond the unrealistically low $70 billion penciled in for next year and nothing for subsequent years.

Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, gave reporters a preview of his $3 trillion plan, which would clear the way for various other committees to begin writing specific bills carrying out the budget's goals.

But with the White House already threatening to veto domestic spending bills that exceed Bush's request, Democrats are weighing whether to hold off passing many of them until early next year, when they hope a fellow Democrat will have been elected to replace Bush as president.

The Democratic budget proposal includes about $35 billion to invigorate the U.S. economy, to be used if a $152 billion stimulus package recently signed into law fails to do the job.

That additional money, coupled with more investments in energy, health care, education and public works projects than Bush sought, would "strengthen the economy and create jobs," Conrad said.

Senate Republicans, who are not expected to support the proposal, were criticizing it before being shown the details.