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Obama Tries to Unite Democrats On Budget Plan
House, Senate Want Stronger Deficit Relief

By Lori Montgomery
Washington Post Staff Writer
Thursday, March 26, 2009

President Obama went to Capitol Hill yesterday to rally support among skeptical Senate Democrats for his $3.6 trillion spending plan, focusing attention on the core initiatives that unite the party while downplaying the issues that divide it.

Centrist Democrats who have complained that Obama's spending plan would drive the annual budget deficit to unacceptable levels held their tongues during the 45-minute lunchtime meeting. They asked no questions about deficits or about the administration's controversial push to force its signature investments in health care and education through the Senate without Republican votes.

Despite the meeting's friendly tone, tensions over those issues continued to simmer yesterday as budget leaders in both chambers worked on competing blueprints that would trim Obama's spending request and sharply curtail his plans for tax cuts -- all in an effort to lower deficits over the next five years.

While acknowledging the adjustments to Obama's budget request, Democrats cheered the fact that budget leaders in both chambers would permit Obama's most ambitious and costly initiatives on health care, education and climate change to move forward so long as they do not interfere with deficit reduction.

"There has to be some realism here," said Sen. Charles E. Schumer (D-N.Y.). "We're all unified on four main goals . . . and that is not easy to do."

White House budget director Peter Orszag also claimed victory on the most significant aspects of the president's agenda.

"We are very pleased that the House and Senate budget committees are taking up resolutions that are fully in line with the president's key priorities," Orszag told reporters. The blueprints under consideration "may not be identical twins to what the president submitted, but they are certainly brothers that look an awful lot alike."

In the House, Budget Committee Chairman John M. Spratt Jr. (D-S.C.) unveiled a spending plan that would slice more than $150 billion from Obama's proposal for the fiscal year that begins in October, reducing next year's deficit to $1.22 trillion compared with $1.38 trillion under Obama's request. The House blueprint would cut the deficit to just under $600 billion by 2014, forcing the government to borrow $3.9 trillion over the next five years -- about $500 billion less than Obama's proposal.

Much of the savings for next year would come by jettisoning Obama's plan to spend more on the Treasury Department's financial-sector bailout, a move that would reduce the deficit but would not prevent the president from seeking the cash. Spratt also rejected Obama's proposal to extend a tax break for businesses that lose money. And he trimmed $7 billion from a funding request for other government agencies, with the bulk of the reduction targeting international programs.

The House proposal would make bigger changes in future years, slicing another $60 billion from Obama's request for non-defense programs and rejecting the president's proposal to permanently exempt millions of middle-class families from the expensive alternative minimum tax. Like the Senate, the House also scrapped Obama's plan to extend an $800 tax cut for working families that was temporarily enacted in the economic stimulus package.

Spratt largely glossed over those changes as he unveiled his spending plan yesterday, instead focusing on the blueprint's support for the president's agenda.

Late last night, the House Budget Committee approved the blueprint 24 to 15, along party lines, the Associated Press reported. The Senate committee is expected to vote on its plan today. Their respective chambers take up the plans next week.

Differences between the two chambers would then have to be resolved in a conference committee after the Easter break. Obama would not have to sign the resulting resolution, which would not have the force of law. But it would set guidelines for lawmakers as they craft spending bills and draft legislation to implement Obama's policies.

One key difference between the House and Senate blueprints is a decision by House leaders to include a procedural shortcut to help pass Obama's health-care initiative, as well as his plan to expand federal aid for college students. The maneuver, known as reconciliation, would allow the Senate to approve those measures with 51 votes instead of the usual 60, meaning Democrats could pass them without any GOP votes.

House leaders say they do not plan to use the maneuver for Obama's climate-change initiative -- a contentious proposal, known as cap and trade, to force industries that emit greenhouse gases to purchase permits to pollute-- though the House blueprint leaves open that possibility.

Senate Republicans and many Democrats adamantly oppose reconciliation, particularly for cap and trade. But some influential Democrats also oppose using the maneuver for health-care reform, arguing that major changes in the nation's health system should not be rushed to approval by a narrow majority.

The Senate's blueprint also would cut deficits more aggressively over the next five years than the House plan, and it would trim $15 billion from Obama's request for government programs next year compared with the $7 billion cut in the House.

Staff writers Michael Fletcher and Shailagh Murray contributed.

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