March 26, 2009 / 4:12 AM / 8 years ago

Senate Democrats move ahead with budget plan

<p>Vice President Joe Biden listens to House Speaker Nancy Pelosi prior to their meeting on Capitol Hill, Match 25, 2009. REUTERS/Jim Young</p>

WASHINGTON (Reuters) - Democrats in the U.S. Congress on Thursday pushed forward President Barack Obama’s $3.55 trillion budget proposal with minor changes, brushing aside Republican attempts to slash spending and taxes.

Budget committees in the Senate and House of Representatives shaved some spending and tax breaks from Obama’s fiscal 2010 spending plan, which he has described as central to his attempt to rescue the U.S. economy.

But Democratic leaders, who will take the proposals to full chamber votes next week, were still scrambling to keep their support lined up amid bipartisan criticism that the plan would make the deficit soar by $9.3 trillion over the next decade.

“I‘m not looking for reasons to vote against it, but at the end of the day that is always a possibility if I think the revenues are something I can’t live with and or the spending is too much,” Senator Ben Nelson, a moderate Democrat who was key to passing the $787 billion stimulus bill, told reporters.

Nelson said about 15 moderate Democrats would meet next week to discuss the budget proposals and possible changes.

“There may be a couple of (Democratic) senators who may not like what’s going on, but it’s a handful,” Senate Majority Leader Harry Reid, flanked by fellow Democratic leaders, told a news conference.

“I feel very comfortable that we are going to be able to pass a budget that is going to protect what we need to protect -- education, health care and energy and cut the budget (deficit) in half,” he said.

COURTING MODERATES

The Senate Budget Committee on Thursday approved its own $3.41 trillion 2010 budget plan, adopting a handful of amendments but rejecting Republican efforts to slice billions of dollars by freezing some government spending.

The House Budget Committee late on Wednesday passed its $3.45 trillion budget plan that included large new investments in education and in healthcare.

“We’ll have a strong vote next week” to pass the measure, Senate Budget Committee Chairman Kent Conrad told reporters.

The budget requires a simple majority and while Democrats control 58 of the 100 Senate seats, they must walk a fine line not to shed too many moderates.

Conrad said he did not expect Republicans to support it.

Obama has argued that big spending is required to help pull the country out of its recession and help accomplish his goals of overhauling U.S. energy, healthcare and education programs.

<p>President Barack Obama is joined by members of Congress and local students as he congratulates astronauts in orbit on the International Space Station and Space Shuttle Discovery, from the Roosevelt Room of the White House in Washington, March 24, 2009. REUTERS/Larry Downing</p>

But critics in both parties say the spending plan goes too far, setting up a showdown that could affect everything from bond rates and the value of the dollar to the future of middle-class tax cuts.

The Democrats plan to pass their budgets in the full House and Senate next week, with or without Republican support, and work out a final compromise next month.

Obama has lobbied to keep moderate Democrats from bolting and challenged Republicans to offer their own ideas.

House Minority Leader John Boehner offered a 17-page pamphlet he described as a Republican alternative to Obama’s budget, saying it “will return fiscal sanity in Washington.”

Boehner called it a leaner budget, with lower taxes and less government borrowing. Lean it is -- several pages were chapter titles or attacks of Democratic positions.

The document lacked deficit projections that would result from the Republican plan, how much it would reduce the growth in government debt or specifically where savings would be accomplished. Nor did it forecast U.S. economic performance, which has a big impact on deficits.

Republicans said those details would be provided next week.

What proposals House Republicans did detail included a parallel income tax system with two brackets instead of six, 10 percent for income under $100,000 and 25 percent for earnings above that level.

SENATE PANEL FINISHES ITS PLAN

While any budget Congress passes would be nonbinding, it would set the funding parameters for such Obama initiatives as alternative energy development, the overhaul of the healthcare system and controlling the size of budget deficits.

The House and Senate proposals leave to committees the difficult task of crafting those initiatives Obama is seeking, but without adding to deficits.

The Senate Budget Committee adopted amendments including one to create a commission to root out government programs that no longer were needed, and another to authorize a probe into how the financial crisis originated.

It also agreed to take $350 million from crop insurance and put it toward child nutrition and deficit reduction over five years.

Both committees rejected Obama proposals to make permanent a new $400 tax cut for workers unless the White House finds a way to pay for it, and to set aside $250 billion in case additional money is needed to bail out banks and other financial firms.

Editing by Xavier Briand

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