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Senate passes $2.8 trillion spending blueprint

The Senate on Thursday passed an election-year budget plan without President Bush’s tax cuts and Medicare curbs, hours after lifting the ceiling on the national debt to $9 trillion.
/ Source: The Associated Press

The Senate on Thursday passed an election-year budget plan forsaking President Bush’s tax cuts and Medicare curbs, hours after lifting the ceiling on the national debt to $9 trillion.

The spending blueprint, approved 51-49, little resembles Bush’s proposal last month for the budget year that begins Oct. 1.

To the disappointment of budget hawks, the Senate’s measure would break Bush’s proposed caps on spending for programs such as education, low-income heating subsidies and health research.

Vice President Dick Cheney was on hand for a possible tie-breaking vote, but that proved unnecessary.

Senators earlier voted 52-48 to send Bush a measure that would allow the government to borrow an additional $781 billion and prevent a first-ever default on Treasury notes.

War money without raising taxes
As a result, the government could pay for the war in Iraq without raising taxes or cutting popular domestic programs.

The House, meanwhile, overwhelmingly approved a $92 billion measure that would provide more money for the war in Iraq and hurricane relief for the Gulf Coast.

The budget blueprint advanced without Cheney’s vote in the Republican-led Senate when Democratic Sen. Mary Landrieu supported the plan after winning concessions to help her hurricane-damaged state of Louisiana and the Gulf Coast.

She won inclusion of a proposal that could provide up $2 billion a year for levee and coastal restoration projects. The money would come from auctioning television airwaves to wireless companies and from potential oil lease revenues from exploration in an Alaskan wildlife refuge.

Among the specific votes for the budget plan were:

  • $3 billion more for heating subsidies for the poor. It passed 51-49.
  • $7 billion more for education, health and worker safety accounts. It passed 73-27.
  • $1.2 billion more for aviation security and stopping Bush’s proposed increase in airline ticket taxes. They advanced by voice vote.
  • $1 billion more for benefits for military survivors.

The votes Thursday set up a confrontation with the House, which is certain to oppose the additional spending.

Budget plan delayed?
In fact, the Senate’s moves appear to make it less likely that Congress will settle on a final budget plan this spring. House Republicans will not release their budget until after next week’s congressional recess.

The votes dismayed deficit hawks such as Senate Budget Committee Chairman Judd Gregg, R-N.H. He already had decided to drop Bush’s proposals to cut the growth of Medicare, strengthen tax-free health savings accounts and advance legislation to make permanent his 2001 tax cuts.

Republicans are eager to show their conservative supporters that they are getting serious about cracking down on spending. Last weekend, GOP presidential aspirants at the Southern Republican Leadership Conference in Memphis, Tenn., promised to be more thrifty with the people’s money.

But GOP moderates such as Sen. Arlen Specter of Pennsylvania apparently did not get the message. His amendment to add $7 billion for education, health and labor programs won support from most Republicans, including Majority Leader Bill Frist of Tennessee, who has criticized Congress for embarking “down a wayward path of wasteful Washington spending.”

“All the talk in Memphis just doesn’t comport with the realities of these important items” such as education and health research, Specter said.

Budget deficit expected to near $400 billion
The debt limit increase was the fourth of Bush’s presidency, totaling $3 trillion. With the budget deficit expected to approach $400 billion for both this year and next, an additional increase in the debt limit almost certainly will be required next year.

Treasury Secretary John Snow applauded Congress for “protecting the full faith and credit of the United States.” He said it ensures that the government “can deliver on promises already made, such as Social Security and Medicare payments and aid for the victims of the 2005 hurricanes.”

The present limit on the debt is $8.2 trillion.

The increase is an unhappy necessity — the alternative would be a disastrous first-ever default on U.S. obligations — that greatly overshadowed a mostly symbolic, weeklong debate on the GOP’s budget resolution.

Democrats blasted the bill, saying it was needed because of fiscal mismanagement by Bush, who came to office when the government was running record surpluses.

“When it comes to deficits, this president owns all the records,” said Senate Minority Leader Harry Reid, D-Nev. “The three largest deficits in our nation’s history have all occurred under this administration’s watch.”

Unlike last year, when Congress passed a bill trimming $39 billion from the deficit through curbs to Medicaid, Medicare and student loan subsidies, Senate GOP leaders have abandoned plans to cut mandatory programs.