Senators Wrangle Over Cuts in Budget Plan

By ANDREW TAYLOR

WASHINGTON – A key Senate panel wrestled over a scaled-back version of President Bush’s budget Thursday, one shorn of signature initiatives like tax relief and cuts to federal benefit programs such as Medicare.

With Republicans nervous about cutting popular programs in an election year and still nursing wounds from a bruising round of benefit cuts last year, the Budget Committee instead debated a budget that takes few risks but also makes little progress in addressing the long-term fiscal problems facing the government, chiefly the booming growth in benefit programs like Medicare and Medicaid.

Driven by election-year political concerns, Budget Committee Chairman Judd Gregg, R-N.H., instead dropped Bush’s proposals for expanding tax-free medical accounts and restraining Medicare spending. He also seeks to shift about $5 billion from the Pentagon and foreign aid budgets to cash-strapped domestic programs like education and homeland security.

Gregg’s plan would produce a $359 billion deficit next year. Deficits would drop to $177 billion by 2011.

Democrats castigated Gregg’s plan, saying that it would produce those lower deficits only by leaving out the long-term costs of the war in Iraq and the price of establishing Bush’s Social Security personal accounts and failing to address the ever-increasing impact that the alternative minimum tax is having on middle-class taxpayers.

“Now is the time that cries out for bold action,” Sen. Kent Conrad, D-N.D. “We need to reduce our deficits and reign in the exploding debt that continues under this plan.”

But most of the Democratic amendments offered Thursday would increase spending on a variety of programs, including veterans’ medical care, ports security and firefighter grants. They were rejected by early afternoon votes and party-line approval of the plan was expected.

Gregg’s plan hasn’t won much better reviews from Republicans, including Pete Domenici of New Mexico, Lamar Alexander of Tennessee and John Cornyn of Texas..

They said it failed to address the long-term spiraling growth of Social Security, Medicare and other benefit programs that threaten to swamp the budget with the retirement of the baby boom generation.

“Unfortunately, the (budget) does not … help Congress reform such programs as Medicaid and Medicare, which both grow at average rate of around 8 percent each year through 2015 and will continue to eat up more of the total federal budget,” Cornyn said.

Domenici, an old-school member of the powerful Appropriations Committee, is also unhappy that the measure endorses Bush’s stringent “caps” on domestic programs like education, water projects and health care research. He may offer an amendment on the floor next week to increase the cap, set by Gregg at $873 billion.

For his part, Gregg says he would like to be more ambitious on spending cuts, but does not have the votes to pass them, since so many senators are jittery about voting on them in an election year.

Given all of the election-year nervousness, is not clear whether the House and Senate will be able to agree on a final budget. The House has postponed work on its version until late this month at the earliest; the modest Senate plan may not go far enough for conservatives in the House.

The GOP blueprint revives last year’s battle over allowing oil drilling in an Alaskan wildlife refuge by awarding filibuster-proof protection for a provision opening the area to exploration.

Bush’s tax cuts generally expire in 2010; Gregg’s budget assumes extending them would cost $154 billion the following year. If they were allowed to expire, the 2011 deficit would be just $23 billion, assuming the rest of Gregg’s plan were to be adopted.

Domenici, chairman of the Senate Energy and Natural Resources Committee, is more enthusiastic about the idea of setting up the Alaskan oil exploration measure in the budget so Democrats are blocked from endlessly stalling it.

Last year, the drilling effort failed because Republican opponents in the House teamed up with Democrats fighting GOP budget cuts to knock out the plan.

Congress’ annual budget resolution is a nonbinding blueprint that sets the limits of subsequent bills to put in place the plan.

Since Senate GOP leaders don’t anticipate using the fast-track budget process to give filibuster-proof protection in the Senate to new tax cuts or spending curbs, there’s considerably less pressure to adopt a budget than there was last year.

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On the Net:

http://www.budget.senate.gov