updated 4/6/2006 8:29:59 PM ET 2006-04-07T00:29:59

Feuds among party factions sank hopes for a $2.8 trillion Republican budget blueprint for the upcoming year, just hours after debate opened Thursday.

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Opposition to the plan among moderates and a power struggle between a faction of conservatives and the Appropriations Committee led GOP leaders to pull the measure from the floor, though they hope to revive it when the House returns from a two-week recess.

Republican leaders tried to mend the rifts, but rival factions dug in stubbornly Thursday, battling over domestic spending, procedures for passing disaster aid and earmark “reform.”

Failure to pass a budget would embarrass the newly overhauled House GOP leadership, which is trying to show voters that it’s cracking down on spending.

The budget resolution is a nonbinding blueprint that establishes lawmakers’ tax and spending priorities. It sets the outlines for subsequent bills that cut or raise taxes and spending.

With Republicans anticipating a mostly stand-pat year — with no major tax cuts on the agenda and efforts to cut benefit programs iffy at best — passing a budget plan isn’t critical.

Election-year reality sets in
This year’s budget plan, developed by the House Budget Committee, reflects election-year realities and drops President Bush’s proposed cuts to Medicare, Medicaid, crop subsidies and other politically sensitive programs. But to the dismay of moderates, the proposal adopts the president’s plan to trim spending by most Cabinet agencies.

The plan — covering the 2007 budget year beginning Oct. 1 — adopts Bush’s $873 billion cap on agency budgets renewed by Congress each year. It also assumes just $50 billion for the wars in Afghanistan and Iraq, less than one-half of expected spending for the current year.

Even so, it would produce a deficit of $348 billion in 2007 and deficits totaling more than $1 trillion through 2011 if Congress enacts its policies.

Democrats blasted Republicans for their fiscal record but also criticized cuts in spending on domestic programs.

“Why do all the tough choices hurt average families?” asked Rep. Jim McGovern, D-Mass. “Why don’t some of the tough choices include forgoing tax cuts for wealthy people or ending subsidies and tax breaks for oil companies that are gouging families at the pump?”

Moderates, conservatives clash
The spending cap has sparked a battle between Republican conservatives, who are eager to crack down on agency budgets, and party moderates who are trying to reverse cuts to popular programs such as education and health research. GOP leaders sided with conservatives, and a group of perhaps a dozen moderates led by Mike Castle, R-Del., vowed to oppose the plan.

At the same time, Appropriations Committee Chairman Jerry Lewis, R-Calif., feuded with conservatives over their demands for overhauling the congressional budget process.

Lewis especially objects to a plan by Budget Committee Chairman Jim Nussle, R-Iowa, to establish a “rainy day fund” that would make it difficult to pass disaster aid that exceeds $4.3 billion unless the Budget Committee approves it.

“I cannot and will not support a (budget) that greatly diminishes Congress’ ability to respond to national disasters,” Lewis said in a statement.

Conservatives also wanted promises from GOP leaders to overhaul the much-maligned practice of earmarking spending bills with hometown projects, but the Appropriations panel said no way.

Republican unity was essential to passing the plan, since no House Democrats were expected to back it.

The plan endorses Bush’s call for a 7 percent increase in the core defense budget — which doesn’t include Iraq war costs — for next year. That increase comes at the expense of domestic programs like education, health research and grants to local governments and relief agencies.

‘Security must come first’
Republicans said spending on defense and tax cuts to spur economic growth are a higher priority than spending on domestic programs, no matter how popular.

“Our security must come first or none of these other programs will matter much,” Nussle said.

The plan also assumes $226 billion in additional tax cuts over five years, more than half of which would go for extending Bush’s 2001 and 2003 tax cuts. Most of those cuts are set to expire in 2010. But the committee didn’t take the necessary steps under Congress’ arcane budget process to facilitate speedy action on a tax bill.

After passing a five-year, $39 billion bill cutting Medicare, Medicaid and student loan subsidies last year, the latest budget proposes just $6.8 billion in savings spread over five years from such so-called mandatory programs whose budgets typically rise with inflation and population growth.

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