Senate panel approves budget plan with more cuts than Obama's

By Lori Montgomery
Washington Post Staff Writer
Friday, April 23, 2010

A Senate panel on Thursday approved a $3.7 trillion budget blueprint that would reduce projected deficits by trimming spending unrelated to national defense as it forces lawmakers to cover the cost of popular tax breaks after 2012, including provisions that protect millions of middle-class taxpayers from the alternative minimum tax.

On a party-line vote of 12 to 10, the Senate Budget Committee approved the spending plan, which includes tougher restraints than President Obama proposed in the request he delivered to Congress in February. Under the committee's proposal, the deficit would hover around $1.3 trillion in the fiscal year that begins in October but fall to $545 billion by 2015 -- nearly $250 billion lower than Obama's proposed target.

Getting there would not be easy. Covering the AMT provisions alone would require hundreds of billions of dollars in new taxes or spending cuts. And, although the Senate blueprint is designed to be more politically palatable than Obama's request, it faces an uncertain future as congressional leaders try to decide whether to force Democratic lawmakers to ratify what remains a bleak budget outlook even as they prepare to face voters in midterm elections this fall.

House leaders have acknowledged that it would be difficult to pass a budget because House Democrats from conservative districts are reluctant to appear to support large deficits. Senate leaders have said they plan to bring a budget to the floor before Memorial Day, but Democratic aides said that may not happen if the House decides to craft a budget that has no chance of final passage.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) said he remains optimistic that the Senate will approve a budget resolution, a nonbinding document that nonetheless plays an important role in establishing spending limits and other budget policies.

"This budget is fiscally responsible and provides a solid framework for accelerating our nation's economic recovery and restoring our fiscal strength," Conrad said in a statement Thursday. "I look forward to taking this budget up on the Senate floor."

The budget plan adopts Obama's proposal to freeze non-defense spending, then goes a bit further, slicing $9.5 billion from discretionary spending in fiscal year 2011. About half of the savings would come from the State Department and other international programs, a proposal that on Thursday drew a written complaint from Secretary of State Hillary Rodham Clinton.

The rest of the cuts would come from elsewhere in the discretionary budget in order to finance Obama's plan to expand the federal Pell Grant program.

The budget blueprint also contains provisions that would permit lawmakers to deal with contentious tax issues using the same fast-track procedure that allowed the Senate to pass the recent health-care bill with just 50 votes. Known as reconciliation, the procedure could be used to raise the legal debt limit and to extend a variety of middle-class tax cuts enacted during the Bush administration, which are scheduled to expire later this year.

The procedure could not be used if Congress fails to adopt a budget resolution, giving Democrats a big incentive to press forward. Otherwise, they are likely to need at least one Senate Republican to vote with them to extend most of the Bush tax cuts while letting others, primarily those benefiting the rich, expire on schedule.

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