March 9, 2006

Senators craft FY07 budget with big defense tab

By Richard Cowan

WASHINGTON (Reuters) - The Senate Budget Committee narrowly
approved a fiscal 2007 budget plan on Thursday that would
substantially hike defense funding and provoke another
confrontation over whether to open a protected area of Alaska
to oil and gas drilling.

On a partisan 11-10 vote, the committee sent the budget to
the Senate floor, where debate could begin on Monday. The
budget blueprint is nonbinding but it does shape congressional
spending decisions.

Under the Republican-backed plan, defense funding would hit
$457.1 billion, about $18 billion more than requested by
President George W. Bush last month and a $25 billion increase
from this year's budget.

That total would be in addition to the about $86 billion
the committee anticipates for next year's wars in Iraq and
Afghanistan. That figure could go higher.

Budget Committee Republicans boasted that defense spending
would be "double that of 1998 and well above the Cold War

Committee Chairman Judd Gregg, a New Hampshire Republican,
said his budget would cut U.S. deficits in half over the next
four years. "It obviously does not resolve all the debt
issues," Gregg said, adding, "but it contains spending and
that's our job."

Last year's budget passed the Senate by a narrow margin and
without any support from Democrats. Gregg said passage this
year would again be "a challenge" and predicted the Alaska
drilling provision "will be a major item of debate."

Sen. Kent Conrad of North Dakota, the senior Democrat on
the committee, blasted the Republican budget, saying it doesn't
factor in some significant future costs. "If you like debt,
you'll love this budget. Up, up and away," he added.

Conrad complained that the Republican plan would increase
U.S. debt by more than $600 billion annually for the next five

Besides debating a budget next week, the Republican-led
Senate is expected to vote on politically-difficult legislation
to increase U.S. borrowing authority by as much as $781
billion. The measure is needed because of rising debt that is
pushing the Treasury Department up to its $8.18 trillion
borrowing limit.

The Senate's budget plan would result in a $359 billion
government deficit, down slightly from the $371 billion in red
ink recently estimated for this fiscal year that ends September
30 by the Congressional Budget Office.


The annual budget process stirs spirited wrangling between
Republicans and Democrats as the document sets policies that
touch on virtually every nook of American society.

On a party-line vote, Democrats failed to remove the
provision to open Alaska's Arctic National Wildlife Refuge for
energy development.

The language was tucked into the budget so that under
obscure Senate rules it could be approved on a simple majority
vote. A similar Republican tactic last year was ultimately
foiled by moderate Republicans in the House of Representatives
who opposed the drilling.

Senate Democrats also failed in attempts to add money for
avian flu preparations, veterans health care, firefighter
programs, port security and education.

In nearly all of those cases, Gregg said the government
already had adequately increased funding.

The Medicare health care program for the elderly would
receive $382 billion in fiscal 2007 that starts October 1, a
$55 billion increase over this year. Gregg said he expects a $7
billion fund for private health plans in Medicare to be cut.

Gregg abandoned hopes of pursuing more long-term savings to
the program in this election year.