Senate, House approve fiscal 2009 budget plans

By Richard Cowan and Donna Smith

WASHINGTON (Reuters) - The Senate passed a budget plan on Friday to eliminate the federal deficit by 2012 while spending more than President George W. Bush wants on domestic programs like schools and roads.

After a 15-hour debate that began on Thursday, the Senate voted 51-44 mostly along party lines to approve a nonbinding $3 trillion Democratic budget blueprint for the year beginning October 1.

Before passing the measure, senators easily rejected a one-year ban on controversial spending projects, known as earmarks, that benefit specific cities or towns.

But they approved adding money for some international activities, including foreign aid, Iraq reconstruction, fighting AIDS globally and nuclear nonproliferation.

On Thursday, the Democratic-led House of Representatives voted 212-207 for a similar version of the budget without any Republicans supporting the measure.

Much of the House debate centered on Republican charges the bill eventually would bring a record tax increase. Democrats countered it would protect middle-class tax cuts now in place that are set to expire at the end of 2010.

This week's votes are certain to be fodder for a spirited debate on government taxes and spending in the presidential and congressional campaigns leading up to the November election.

The three main presidential candidates -- Democratic Sens. Barack Obama of Illinois and Hillary Clinton of New York and Republican Sen. John McCain of Arizona -- interrupted their campaigns to cast votes.