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Senate adopts budget embracing Obama’s goals

Congress capped President Barack Obama's 100th day in office by advancing a $3.4 trillion federal budget for next year — a third of it borrowed.
/ Source: The Associated Press

The U.S. Senate voted Wednesday to pass a $3.4 trillion compromise budget plan, just hours after the same measure was approved by House lawmakers.

The spending plan is a nonbinding document and will not go to the president for his signature. Instead, the vote in both houses of Congress to adopt the budget blueprint is only a first step toward Obama's goal of providing health care coverage for all Americans.

The budget plan sets the parameters for subsequent tax and spending bills expected to boost clean energy programs and student aid and extend many of President George W. Bush's tax cuts. But the plan also fails to approve a renewal of Obama's $400 tax cut for most workers after it expires next year.

The vote in the Senate was 53-43.

"It's a budget that reduces taxes, lowers the deficit and creates jobs," said House Speaker Nancy Pelosi, a Democrat, just after the spending plan passed in the House by a vote of 233 to 193. "It honors the three pillars of the Obama initiatives: energy, health care and education."

It also makes it plain that Democrats will not let a mountain of deficits and debt interfere with advancing Obama's ambitious but costly agenda.

The plan gives Democrats the option of advancing Obama's health care plan through Congress without the threat of a Republican filibuster, or delaying debate, though Democrats promise to try to find bipartisan agreement.

No GOP support
Newly turned Democrat Arlen Specter of Pennsylvania voted against the measure as he did when it initially passed the Senate earlier this month. Three other Democrats also voted no: Ben Nelson, Robert Byrd and Evan Bayh.

Seventeen House Democrats, mostly from Republican-leaning districts, voted against the budget.

Not a single Republican in the House or Senate voted for the measure.

Obama inherited an economy in deep recession and a financial bailout costing hundreds of billions of dollars, and even some Republicans did not fault him for deficits rocketing to $1.7 trillion for the ongoing budget year and a still-stunning $1.2 trillion in 2010.

"We inherited a colossal mess," said Senate Budget Committee Chairman Kent Conrad, a Democrat. "Colossal."

As a result, Democrats opted against extending Obama's signature $400 tax cut for most workers and cut $10 billion from his budget for non-defense programs passed by Congress each year. Also gone are revenues from Obama's "cap-and-trade" plan for curbing global warming by auctioning permits to emit greenhouse gases.

Republicans assaulted the plan as just the latest example of a spending spree by Democrats that started with Obama's $787 billion economic stimulus bill. It was followed by an omnibus appropriations bill that rewarded domestic programs with generous increases and included 8,000 pet projects for lawmakers' districts and states.

"It spends money we don't have, piles unprecedented debt on our children and grandchildren, and raises taxes on families and small businesses, while taking away the middle-class tax cut the president promised during the campaign," said House Republican leader John Boehner.

Deficit would drop to $523 billion
Under the plan, the deficit would drop to $523 billion in 2014, but even that figure depends on several unrealistic assumptions, notably that Congress will devote only $50 billion a year for operations in Iraq and Afghanistan for 2011 and beyond, and unrealistic projections of costs for core Pentagon operations.

There's considerable accounting legerdemain in the Democratic plan as well, reflecting a struggle by Democrats to cut the budget deficit to 3 percent of the size of the economy within five years — a figure economists say is sustainable without adding crippling debt to the U.S. books.

Rep. Paul Ryan, a Republican, R-Wis., said that news that the economy had shrunk by 6.1 percent in the first quarter highlighted the likelihood that the deficit numbers are even worse than predicted in the budget.

"Put reality into the budget and the deficits and debt go much higher," Ryan said.