Senate Budget Would Expand Health Care

By Lori Montgomery
Washington Post Staff Writer
Wednesday, March 14, 2007

Senate Democrats unveiled a spending blueprint yesterday that envisions a massive expansion of the nation's health-insurance program for children, as well as billions of additional dollars for other domestic priorities such as public education, veterans' health care and local police.

Despite the additional spending, Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said the proposal would virtually erase the federal deficit within four years without raising taxes and produce a surplus of $132 billion by 2012.

Under that scenario, Conrad said, Congress could extend President Bush's signature tax cuts past their 2010 expiration date and halt the expansion of the alternative minimum tax, but only if sufficient revenue is raised elsewhere to cover the cost of about $800 billion over five years.

"We believe some of the tax cuts will be extended. Perhaps all of them will be," Conrad said during a late-afternoon briefing for reporters at his Capitol Hill office. "You can extend any or all of them, if you pay for them."

Conrad was vague on the details of how that might be accomplished. Possible sources for the extra cash, he said, include improving taxpayer compliance, eliminating offshore tax havens and conducting a top-to-bottom overhaul of the tax system.

The briefing yesterday, billed as a preview of a budget document that is to be released today to the Senate Budget Committee, marks the beginning of a months-long attempt by the new Democratic majority to craft an alternative to Bush's spending plan for the budget year that begins in October.

It also marks another step to restore discipline to the congressional budget process, which has faltered badly over the past decade. Last year, the Republican-controlled Congress failed to agree on an overall spending plan and adjourned without voting on 11 of 13 bills that fund most of the federal government.

Democrats vowed to change that and already have adopted rules requiring that new spending or tax cuts be offset by budget cuts or tax increases. Both chambers will now attempt to adopt a single spending plan, or budget resolution. Conrad has been working closely with House Budget Committee Chairman John M. Spratt Jr. (D-S.C.), who expects to unveil his own blueprint next week. Both houses are expected to vote on the measures by the end of the month.

"Three of the last five years, there's been no budget for this country," Conrad said in an interview. By agreeing on a budget resolution, "we will send a signal to the country that Congress is able to be responsible, able to govern and able to make choices," he said.

Bush has also offered a plan to erase the deficit by 2012, but his proposal would freeze or cut most domestic programs to allow the extension of his tax cuts. Democrats have criticized the Bush budget, saying it relies on gimmicks to achieve balance, including overly optimistic economic assumptions, insufficient funds for the Iraq war and the expansion of the alternative minimum tax to millions of additional taxpayers.

By that measure, Conrad's budget does not do much better, analysts said. Like Bush, Conrad's version includes about $145 billion for military operations in Iraq and Afghanistan for 2008, and $50 billion for 2009. And while Conrad's budget would halt the expansion of the alternative minimum tax for two years rather than one, as the Bush budget does, Conrad, too, assumes that revenue from the AMT would continue to roll in thereafter.

Bush and Conrad "both come out to a balanced budget by 2012, but it's through equally improbable routes," said Robert L. Bixby, executive director of the Concord Coalition, a group dedicated to deficit reduction. "It's sort of an Alice in Wonderland approach to the budget."

Bush and Democrats have vowed to reform the AMT, which is expected to affect about 4.2 million taxpayers in April but would hit more than 30 million families in 2010 without congressional action. The White House has offered no options for recovering that revenue; Conrad said his budget plan would "create an incentive for tax reform." Steps could include stepped-up enforcement to collect from more from people who cheat on their taxes, he said, as well as well closing offshore tax havens that cost the government as much as $100 billion a year.

Conrad provided few details about the spending side of the budget plan. He said he would devote only slightly more spending overall to domestic programs than the president proposes.

Conrad said, however, that Democrats would add more money for certain priorities, including $6 billion more than Bush's request for public education next year, $3.5 billion more than the president's request for veterans' health care and full funding for a grant program that pays for local police officers. Bush has proposed slashing the grant program by 94 percent, Conrad said.

Democrats in both chambers have also vowed to provide $50 billion more over five years for the State Children's Health Insurance Program, a sum that would allow states to extend coverage to many of the nation's 8.3 million uninsured children.

Conrad said his budget would cover $15 billion of that extra funding. The other $35 billion would be made available to the states only if other Senate committees come up with spending cuts or new revenue to pay for it.

© 2007 The Washington Post Company