(Updates with further information about Senate vote) By Corey Boles Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- The U.S. Senate voted along party lines Wednesday to approve a budget resolution that includes more than $1 trillion in discretionary spending for the first time. The resolution would result in a $340 billion deficit in fiscal year 2009, which begins Oct. 1, but aim to return to a budget surplus in 2012 and 2013. The vote was 48-45. "I'm delighted we've completed this budget process," said Sen. Kent Conrad, D-N.D., the Budget Committee chairman. Conrad said the budget would focus spending on reducing the U.S. dependence on foreign oil, education and on repairing the country's bridges, roads and sewer systems. The total discretionary spending was $1.013 trillion. Combined with mandatory spending, total expenditures reached around $3 trillion. The discretionary spending was $21 billion more than requested by President George W. Bush in his budget in May. There had been some uncertainty over whether the Democratic majority would have the votes to pass the resolution, due to the illnesses of Sens. Edward Kennedy, D-Mass., and Robert Byrd, D-W.Va. But in a rare move of bipartisanship, two Republican lawmakers, Sens. Pete Domenici, R-N.M., and John Warner, R-Va., agreed to withhold their votes against the measure so it could pass, out of respect for the absent lawmakers. Fresh off clinching the Democratic nomination for the presidency Tuesday night, Sen. Barack Obama, D-Ill., returned to the Senate to cast a vote in favor of the measure. "This budget provides for middle-class tax relief while making critical investments in education, energy independence, support for our veterans and job-creating infrastructure," Obama said. Obama won enough delegates to clinch the party's presidential nomination Tuesday evening, although his rival, Sen. Hillary Clinton, D-N.Y., has yet to concede the race. Neither Clinton, nor presumptive Republican nominee Sen. John McCain, R-Ariz., cast a vote on the budget resolution. The House could vote on a budget resolution as soon as Thursday, according to an aide to House Majority Leader Steny Hoyer, D-Md. If the House approves the budget deal, it would mark the first election year since 2000 that Congress was able to reach a deal on the budget. A budget resolution isn't binding and doesn't have to be approved by the president. It sets out the framework for Congress' spending priorities and allows individual appropriations committees to begin pulling together spending bills. In a presidential election year, given the state of relations between congressional Democrats and the administration, it is unlikely many of these spending bills would get signed into law by Bush. Republicans in both the House and Senate have been strongly opposed to the budget as outlined by the Democrats, calling it the largest tax increase in history. That's because Democrats don't renew many of Bush's tax cuts, which are due to expire in the next few years. "The Democrats' big-government budget is clearly a disappointment and shows a lack of awareness of the financial challenges already squeezing American families and businesses," said Sen. Judd Gregg, R-N.H., the Budget Committee's ranking Republican. The White House repeated its opposition to the bill. "During a time of slower economic growth, it is particularly troubling that Congress would approve a budget that would drive our deficit even higher with new spending and raise taxes on American workers," said Jim Nussle, director of the Office of Management and Budget. Five-year budget projections under the resolution would result in a $340 billion deficit in fiscal 2009, a $210 billion deficit in fiscal 2010 and a $73 billion deficit in fiscal 2011, according to Senate Budget Committee figures. The government would run surpluses of $22 billion in fiscal 2012 and $10 billion in fiscal 2013. A deal was struck last month between Conrad, Rep. John Spratt, D-S.C., the chairman of the House Budget Committee, and the fiscally conservative Blue Dogs caucus, which paved the way for the budget vote to occur. The majority of Blue Dog caucus members are now expected to vote for the resolution once it comes to the House floor, although a few may still come out against it. The Blue Dogs' support is crucial to fiscal votes in the House because they control about a fifth of the Democratic House caucus. As part of the deal reached with the Blue Dogs, Conrad agreed that money would be found to pay for the annual patch to protect middle-class Americans from having to pay the alternative minimum tax. Estimated to cost around $70 billion, the patch ensures that middle-income earners aren't hit by a tax that was originally intended to prevent wealthy people from avoiding paying income taxes. Conrad has also agreed to strip $35 billion of economic-stimulus spending from the Senate measure and to work to block any other spending measures over $10 billion introduced in the Senate that aren't offset through spending cuts or taxes raised elsewhere. -By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
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