Politics

Bush Budget Rolls Through House

March 22, 2001 / 11:14 AM EST / CBS/AP

The White House budget chief lauded House Republicans on Thursday for winning the first congressional showdown over President Bush's overall tax and spending plans.

On Wednesday, the House Budget Committee approved a $1.94 trillion spending plan for 2002, reflecting Mr. Bush's priorities, by a party-line 23-19 vote. The Republican dominated House will probably rubber stamp the measure next week.

In a written statement, White House budget director Mitchell Daniels called the panel's action "a critical first step in bringing President Bush's budget to fruition," adding, "We look forward to working with the budget committee and the Congress to make these priorities law."

In the course of a partisan but chummy session that lasted 12 hours, the GOP-led committee swatted down more than two dozen Democratic attempts to rework the measure. The defeated amendments focused on shrinking Mr. Bush's signature $1.6 trillion, 10-year tax cut, shoring up Medicare and Social Security solvency, and other changes.

"Hope, yes, but it's probably not realistic," said budget committee Chairman Jim Nussle, R-Iowa, when asked if next week's full House vote might be less partisan. "It would be very difficult, based on the way things have transpired this year so far."

Despite Mr. Bush's talk of forging cooperation between the two parties, his budget — especially his proposed tax cuts and proposals to brake spending growth — has riven Republicans and Democrats.

Republicans say the tax reduction would add life to the limp economy while leaving plenty of funds for education, defense and other needs.

But Democrats say Mr. Bush's tax cut would soak up money needed for improving schools, bolstering Social Security and Medicare for the baby boomers' retirement, and further reducing the national debt. They prefer a $750 billion tax reduction.

The Bush Tax Plan

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"Now that we've balanced our budget, we'd like to balance our priorities," said Rep. John Spratt of South Carlina, senior Democrat on the budget committee.

Besides the tax cut, the GOP budget uses $2.3 trillion for debt reduction, proposes more money for schools and veterans, and sets aside $153 billion in Medicare surpluses to start a prescription drug benefit and otherwise reshape the huge health insurance program for the elderly.

Though House passage is virtually certain, more drama seems likely in the Senate, where votes were planned for early April. That chamber is divided 50-50 between the two parties, and some GOP moderates have said the tax cut is too large and too tilted toward the rich.

Congress' budget sets tax and spending targets, but otherwise serves as a guide for later bills that will actually enact tax and spending changes and provide details.

Among its few departures from Mr. Bush's budget, the House plan provides slightly deeper tax reductions over the next three years than Mr. Bush's does, with smaller cuts than Bush proposed later in the decade. It ignores his proposal to lease oil drilling rights in Alaska's Arctic National Wildlife Refuge, which environmentalists have opposed, and his plans to phase out some federal flood insurance.

Like the president's proposal, the House GOP plan would limit many programs to overall growth of 4 percent next year. Within those limits, the budget suggests increases for biomedical research, veterans, schools and defense, though final decisions will be made in subsequent legislation.

The House budget does not include big additional spending increases expected later this year to prop up farmers and for the Pentagon. The money for those boosts will come from a 10-year, $517 billion contingency fund that the budget envisions.

Republicans say that reserve fund will have enough money for the government's needs. Democrats say it will not have enough to pay for the tax cuts and new spending that Congress will probably approve, which means the government would have to dip into Medicare trust funds — something both parties have said they will not do.

Under the GOP budget, Congress could to increase the size of the tax cut if this summer's surplus projections rise. But if surplus estimates shrink — as the slowing economy has led some economists to expect — lawmakers could not shrink the tax reduction.