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VOL. 124 | NO. 66 | Monday, April 6, 2009

House, Senate Budget Plans Boost Obama Agenda

ANDREW TAYLOR | Associated Press Writer

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WASHINGTON (AP) - Passage by both House and Senate of companion budget plans gave President Barack Obama and his allies on Capitol Hill a key victory, but the debates also exposed some of the president's vulnerabilities.

Obama's Democratic allies passed plans broadly supporting the young administration's agenda of higher spending on domestic programs like education and overhauling the nation's health care system. The $3.6 trillion House plan passed by a 233-196 vote Thursday.

But 20 House Democrats, mostly lawmakers representing GOP-leaning areas, abandoned Obama on the final vote. That reflected considerable unhappiness over unending deficits. Even after modest cuts to Obama's budget, the House plan predicts a $598 billion deficit in five years, while the Senate plan would produce a $508 billion shortfall.

The Senate approved its budget late Thursday by a 55-43 tally. Only two Democrats – Sens. Evan Bayh of Indiana and Ben Nelson of Nebraska – voted against the plan, along with all 41 Republicans. Sen. Robert Byrd, D-W.Va., did not vote.

In the Senate, Obama lost a symbolic but politically resonant vote on lowering the estate tax, while votes on several GOP amendments demonstrated broad uneasiness with his global warming initiative. Votes there also dealt a severe blow to his plan to help pay for his health care initiative by reducing the tax benefits wealthier people take on itemized deductions like charitable gifts and mortgage interest.

At the same time, the debate also exposed political weaknesses in his House GOP rivals. Republicans in the House had even more defections on their alternative budget, losing 37 of the chamber's more moderate members in a 293-137 tally that rejected cuts to Medicare and the Medicaid health care program for the poor and disabled.

What is more, GOP leaders are clearly nervous that votes in favor of the GOP alternative have exposed their members to political danger.

The plan, drafted by Wisconsin Rep. Paul Ryan, top Republican on the House Budget Committee, called for eventually replacing the traditional Medicare program with subsidies to help retirees enroll in private health care plans. Current beneficiaries would keep their coverage and those 55 and older also would go into the current system.

Critics of the plan said the Medicare subsidies would inevitably not keep pace with inflation and that people in poor health might end up uninsured, while many needy people on Medicaid could lose coverage.

Democrats were relieved to have the torturous budget debate behind them, despite some stumbles in the Senate.

"I think it does provide some momentum. It does provide the framework of his (Obama's) agenda," Sen. Bob Casey, R-Pa., said.

Congressional budget resolutions are nonbinding blueprints that set goals for future legislation. But the companion House and Senate 2010 budget plans are light on detail, offering little guidance on how to pay for a health care overhaul or an extension of Obama's signature $400 tax credit for most workers.

The most contentious question facing House and Senate Democratic negotiators responsible for producing a final compromise is whether to use the measures as a precursor to allowing health care legislation to pass the Senate by a simple majority – which Republicans worry could cut them out of the action – and after just 20 hours of debate.

Seeking the upper hand over Senate Republicans, House leaders are insisting on having a filibuster-proof bill at the ready if bipartisan efforts to pass health care fall apart. That effort is being resisted by the Senate, though it seems increasingly likely that House Speaker Nancy Pelosi, D-Calif., will prevail.

On global warming, senators voted 67-31 against allowing a future "cap-and-trade" bill to pass the Senate with fewer than 60 votes. The vote indicated considerable Democratic skepticism on global warming legislation, which is likely to lead to significantly higher energy bills, after 26 Democrats voted for the amendment.

And on Thursday, nine Democrats broke with Obama and Democratic leaders to vote in favor of cutting taxes on multimillion-dollar estates. The 51-48 vote endorsed a nonbinding but symbolically important plan by Sens. Blanche Lincoln, D-Ark., and Jon Kyl, R-Ariz., to exempt estates up to $10 million from the estate tax, and taxing estates at a 35 percent rate.

But they would have to raise taxes elsewhere to finance 10-year costs exceeding $100 billion, a difficult chore at best.

Obama is proposing exempting estates up to $7 million and taxing estates at a 45 percent rate instead of the $2 million exemption and 55 percent rate set to take effect in 2011.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

PROPERTY SALES 62 288 2,619
MORTGAGES 52 197 1,783