Democrats’ budget passes in House

WASHINGTON – House Democrats pushed their budget blueprint to passage Thursday, promising a big surplus in five years by allowing tax cuts passed in President Bush’s first term to expire.

The plan would award spending increases next year to both the Pentagon and domestic programs, but defers difficult decisions about unsustainable growth in federal benefit programs such as Medicare.

The 216-210 vote sets up negotiations with the Senate, which last week passed a budget blueprint with spending increases similar to the House plan. The Senate plan would not generate surpluses since it assumes lawmakers will renew the most popular of the tax cuts due to expire at the end of 2010.

Twelve Democrats, mostly from GOP-leaning states such as Indiana, opposed the budget plan.

Democrats said the $2.9 trillion plan for next year would point the way to a surplus after years of red ink under Bush and a GOP-controlled Congress. Republicans countered that a $153 billion surplus in 2012 would appear only if tax cuts passed in 2001 and 2003 expire in four years – amounting to the “largest tax increase in American history.”

The measure reflects a choice by Democrats to increase spending on domestic programs funded each year by appropriations bills – including education, health research, environmental protection and grants to local governments – while forestalling binding decisions on what to do when tax cuts expire.

As a practical matter, the future of the Bush tax cuts will likely be decided after the 2008 presidential election, with their fate depending on the balance of power after the election and on the fiscal outlook at that time.

The House plan would award domestic agencies, on average, budget increases of 6 percent over current levels, far more than the roughly 1 percent increases Bush recommended. Increases under the companion Senate measure are about 4 percent.