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Democrats forge budget agreement

Tue., April 28, 2009

Plan embraces Obama initiatives

WASHINGTON – Congressional Democrats sealed an agreement Monday night on a budget plan that would help President Barack Obama overhaul the health care system but allows his signature tax cut for most workers to expire after next year.

Senate Budget Committee Chairman Kent Conrad, D-N.D., announced the agreement and key details in a statement.

Most importantly, the congressional budget plan would prevent Senate Republicans from delaying or blocking Obama’s plan to vastly expand government-subsidized health care when it advances this fall.

The $3.5 trillion plan for the budget year starting Oct. 1 embraces several of Obama’s key goals besides health care reform, including funds for domestic programs and clean energy, and a tax increase for individuals making more than $200,000 a year or couples making more than $250,000.

But the plan would allow Obama’s signature $400 tax cut for most workers and $800 for couples to expire at the end of next year. Even after squeezing the defense and war budgets to levels that are probably unrealistic, the plan would cause a deficit of $523 billion in five years.

“I think this is a good budget,” Conrad said. But, he added, “much more will have to be done to get us on a more sustainable course,” including slowing the growth of benefit programs like Medicare and overhauling the tax code.

Conrad forced cuts of $10 billion from Obama’s $50 billion boost for non-defense programs funded by Congress each year – not much in the grand scheme but strongly resisted by House Appropriations Committee Chairman David Obey, D-Wis. Future increases for non-defense operating budgets would be far less generous than Obama’s budget, averaging 2.9 percent, though history would suggest that Congress won’t follow through on the long-term promises.

While endorsing Obama initiatives, Democrats focused a lot of attention to preserving President George W. Bush’s tax cuts for middle-class workers, investors and families with children.

Under Capitol Hill’s arcane rules, the annual congressional budget produces an outline for follow-up tax and spending legislation. Most importantly, the measure would allow Obama’s health plan to pass the Senate by a simple majority instead of the 60 votes that are needed for plenty of other legislation.

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