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Democrats Agree on Budget Plan That Avoids the Biggest Decisions

By Lori Montgomery
Washington Post Staff Writer
Wednesday, May 14, 2008

Congressional Democratic leaders have reached agreement on a $3 trillion budget blueprint that would authorize a small increase for domestic priorities and spare millions of households from an unpopular tax. But it postpones most major budget decisions until after this fall's presidential election.

The deal, reached late Friday between House Budget Committee Chairman John M. Spratt Jr. (D-S.C.) and Senate Budget Committee chairman Kent Conrad (D-N.D.), would increase spending on government programs in the fiscal year that begins in October about $20 billion beyond President Bush's request.

It also assumes that Congress will prevent the unpopular alternative minimum tax, or AMT, from striking an additional 20 million families next April. The House dropped demands that the Senate use a special parliamentary maneuver to enact a $70 billion tax increase to recover the revenue that will be lost by limiting the AMT's reach.

Spratt and Conrad said they plan to present the deal to a House-Senate conference committee later this week and bring it to a vote in both chambers before Congress adjourns for Memorial Day. If it is approved, it will mark the first time since 2000 that Congress has been able to agree on a budget blueprint in an election year.

"If they pass it, it will be a major accomplishment that we weren't able to achieve when we were in the majority," said G. William Hoagland, who served as a senior budget aide to former Senate Majority Leader Bill Frist (R-Tenn.) But "the proof is in the pudding as to whether this blueprint will be implemented," Hoagland said, adding: "The chances are not very good."

The budget blueprint is a nonbinding resolution that sets targets for separate spending bills that are normally approved later in the year and sent to the president. This year, however, Democratic leaders have said they are likely to avoid sending most spending bills to Bush, who has again threatened to veto measures that exceed his requests.

Instead, Democrats have said they may wait to approve spending measures for fiscal 2009 until the next president takes office. That makes crafting a budget blueprint something of an academic exercise.

Since there were few differences between the blueprints adopted in March by the House and Senate, negotiators had little to hash out.

Both called for more spending on domestic programs -- the House sought $22 billion more than the president's request, while the Senate sought about $18 billion -- with extra cash set aside for education, energy and veterans' benefits. (Spratt and Conrad ultimately agreed to split the difference.) Both rejected Bush's call to rein in the rapidly rising cost of entitlement programs such as Medicare and Medicaid. Both aimed to erase the deficit within four years. And both assumed that some of Bush's first-term tax cuts would expire on schedule in 2010, prompting Republicans to accuse Democrats of plotting the biggest tax increase in U.S. history.

Both chambers also agreed to extend the tax cuts that target the middle class, including a child tax credit, a reduction in the penalty for married couples and a new 10 percent tax bracket.

In House-Senate negotiations, the biggest battle was over "whether to start paying for things," said Robert Bixby, executive director of the Concord Coalition, a nonprofit dedicated to deficit reduction. A group of 47 conservative House Democrats known as the Blue Dogs tried but failed to win an agreement from the Senate to cover the cost of the AMT. Instead, Conrad agreed to remove from the budget blueprint a second round of economic stimulus provisions that would increase the deficit by $35 billion next year. Conrad also agreed to object when the Senate takes up an AMT bill that does not include new revenue.

But the deal won't stop Congress from adopting additional stimulus measures or fixing the AMT anyway, Conrad said.

Deputy White House budget director Stephen S. McMillin yesterday criticized the budget agreement, saying it seems to spend more money, "avoid hard choices on entitlements" and aim to "keep taxes on Americans as high as they can be."

The "good news," McMillin said, "is that, at least until Jan. 20, 2009, Democrats seem to have conceded they're not going to sneak that extra $20 billion in spending past this president."

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