(Updates throughout with further detail.)
By Corey Boles and Martin Vaughan Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- House and Senate Democrats have unveiled budget plans that exclude two major Obama administration priorities: funding for major health-care overhaul or the creation of a cap-and-trade system to tackle climate change.
The budget proposals essentially leave the tough decisions about how to proceed on health care reform and tackling climate change to the relevant congressional commitees to pursue.
Both budget frameworks would task committees to come up with detailed policies on two of the central themes of President Barack Obama's administration. Crucially, they would insist that both policies were pursued on a revenue-neutral basis rather than allocate funding to them in the proposals released Wednesday.
The House and Senate budget committees Wednesday began their first public work in crafting a tax and spending blueprint for the 2010 fiscal year.
The House panel continued to vote on mainly Republican attempts to amend the budget proposals. It was expected to work late into the night in order to complete consideration of the budget. The Senate is scheduled to take up detailed consideration of its budget framework on Thursday.
Overall, both the House and Senate versions of the fiscal year 2010 budget would spend less than the Obama administration's budget outline.
The Senate budget calls for $525 billion "discretionary spending," excluding defense, in the next fiscal year, while the House would propose to spend $533 billion. By contrast, President Barack Obama's budget would result in $540 billion in such spending, according to the most recent Congressional Budget Office analysis.
Neither the Senate nor House versions would extend the $400-per-worker tax cut that was a centerpiece of the Obama budget. Funding for the measure was included in the economic-stimulus plan for two years.
Speaking to reporters after a meeting between Senate Democrats and Obama in the Capitol, Senate Budget Chairman Kent Conrad, D-N.D., said the president accepted that money would have to be found in the federal budget to extend the making-work-pay credit after the initial two-year period.
Despite the clear differences between their plan and that submitted by the White House, House Democrats played down the extent to which their budgetary framework would hamstring Obama's policy initiatives.
"I think there will be sufficient budget headroom to deliver on what the president requested," said Rep. Earl Blumenauer, D-Ore. "There are some adjustments that it's going to go through in the legislative process."
White House Budget Director Peter Orszag also sought to minimize the differences.
"The resolutions may not be identical twins to what the president submitted, but they are certainly brothers that look an awful lot alike," Orszag said.
Over the longer term, these differences become more dramatic when the growth in the budget deficit is examined.
The House plan forecasts a federal government deficit reduced to 3.5% of U.S. gross domestic product by fiscal year 2014. That's above the 3% level that most economists agree is sustainable over the long term.
The estimate is well below the projected deficit in the Obama budget by fiscal year 2014 -- 4.3% deficit of GDP, according to a CBO estimate.
By contrast, the more moderate Senate budget plan would result in a 2.9% deficit.
The House estimate puts the expected $1.7 trillion fiscal year 2009 deficit at 12.1% of GDP.
House Budget Committee Chairman John Spratt, D-S.C., said that cutting the deficit to 3.5% in 2014 will put the spending deficit on par with annual economic growth, which will take it out of the danger zone.
"We're still unsatisfied with that, and in the long run we'd like to see it come down further," he said.
Both proposals also exclude funding for further taxpayer assistance through the Treasury's Troubled Asset Relief Program. This decision could set up a potential fight between the administration and Congress if Treasury Secretary Timothy Geithner decides more money is needed to stabilize the financial markets.
One difference between the two congressional proposals: The Senate plan includes $216 billion to fix the Alternative Minimum Tax over three years, starting from fiscal year 2010. The House would only propose $70 billion in funding for a one-year fix for the AMT.
The patch for the tax is required each year to ensure that middle-class Americans aren't inadvertently caught by the measure. It originally was intended to affect only the wealthiest Americans but hasn't kept pace with inflation.
Like the Senate, the House version would extend the current estate-tax rules over five years at a cost of $72 billion.
There is another difference between the House and Senate budget plans involving health care. The House is pressing to use a procedural maneuver to help push health-care legislation past Senate Republicans.
Conrad has said he opposes using the procedural tactic.
So too did have other senate lawmakers including moderates like Sens. Ben Nelson, D-Neb., and Arlen Specter, R-Pa.
House Democrats have included as a backstop a Sept. 15 date by which committees could act on legislation that would strong-arm Republicans in the Senate.
But for that to be implemented, Senate budget negotiators would have to agree to it.
The House plan lacks a similar procedural tactic to advance climate-change legislation. "We've pushed the envelope as far as we can," on using strong procedural medicine, said House Budget Chairman Spratt.
The House bill would meet the president's request for $82 billion to fund the wars in Afghanistan and Iraq through the rest of the current fiscal year.
-By Corey Boles and Martin Vaughan, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
(Henry J. Pulizzi and Patrick Yoest contributed to this article.)
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Publié le 25 mars 2009 Copyright © 2009 Dowjones