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Battle Of The Budgets

Democrats began pushing a $2.1 trillion budget for next year through the Senate Budget Committee on Wednesday, saying it focuses on a goal President Bush ignores: halting the use of Social Security funds to create federal surpluses.

But Republicans preparing to push a fiscal blueprint of their own through the House say their plan, which largely resembles the president's 2003 budget, has the right priorities. It would increase defense and domestic security spending while cutting other programs to bring deficits under control.

The two competing proposals were taking separate paths through Congress Wednesday in an election-year showdown contrasting how each party hopes to apportion federal resources — and appeal to voters.

The Democratic-controlled Senate Budget Committee was expected to approve a fiscal plan on Thursday written largely by Chairman Kent Conrad, D-N.D. It would require the president and lawmakers to agree next year to enough savings — now estimated at $433 billion — to balance the budget without Social Security by 2008.

"We ... have an obligation and responsibility to face up to these long-term budget needs," Conrad said.

Enacting such savings now with a weak economy would be wrong, Conrad said.

The panel's top Republican, Sen. Pete Domenici of New Mexico, called Conrad's proposal "a grand illusion." He said it did little but let lawmakers postpone until next year the tough choices about which programs to cut and taxes to increase.

"I don't think the American people want any new taxes," Domenici said. He said shoring up Social Security and Medicare for the retirement of baby boomers could be achieved only "by the growing, prospering American economy and by reform."

In the House, majority Republicans were hoping to move a budget of their own Wednesday. Their plan would rely on $831 billion in Social Security funds to turn overall federal deficits into surpluses beginning in 2004.

"We will pass a budget," predicted House Majority Leader Dick Armey, R-Texas. "It will be as close to balanced as humanly possible given we have a war."

Congress' budget is a nonbinding blueprint that sets overall targets that are often ignored when lawmakers write later spending and tax bills. Even so, it is always a political battlefield because it lets each party highlight its priorities.

Social Security surpluses were spent for other programs for decades until annual federal surpluses appeared in 1998. Both parties then promised to use Social Security surpluses for debt reduction.

Spending Social Security surpluses does not affect the benefits or solvency of the huge pension program for the elderly and disabled, because its trust funds are bulging with trillions in Treasury bonds. But using those surpluses for debt reduction could make it easier for the government to afford the baby boomers' retirement, which begins later this decade.

Mr. Bush has proposed a $48 billion boost for the Pentagon to $379 billion next year, the largest increase in the military budget in two decades. He also would double spending for security at home to $38 billion.

Both the House and Senate budgets incorporate those figures — and would tightly restrain the growth of most other federal programs, excluding automatic benefits like Medicare.

But Conrad said he would set aside some of Mr. Bush's proposed long-range defense increases for more debt reduction if the military didn't need the funds.

Conrad's plan assumes the $1.35 trillion tax cut Republicans won last year will expire as scheduled after 2010 unless the costs of renewing it are paid for. The House budget ignored that question, though Republicans and many Democrats say they don't want it to expire.

The House and Senate proposals would both spend more than the president has proposed to set up Medicare prescription drug benefits and otherwise bolster the program, and for highway construction.