House Budget An Early Win For Obama

Democrats won House approval Thursday of a $3.5 trillion budget plan that keeps faith with President Barack Obama’s domestic priorities while promising to bring health care reform legislation to the floor by next fall.

The partisan 233-196 House vote came as the Senate neared passage of its own alternative, also crafted by Democrats but more of a status quo document when compared with the House resolution or the president’s ambitious plan put forward in February.

Speaker Nancy Pelosi is hopeful that the House-Senate negotiators will be able to produce a final budget soon after Congress returns from its spring recess April 20. And the administration is betting that the final resolution will at least give Obama a clear shot at winning health care legislation this year — free of the threat of Senate filibusters.

“When the American people voted for change in November, they did not vote to send us here to split the difference,” Pelosi said. “They sent us here to make a difference.”

The speaker’s great challenge was to hold her party together in the face of unrelenting deficits stretching into the future. While the picture improves from the record $1.7 trillion shortfall this year, it is a frightening reality now for many lawmakers, and even after scaling back Obama’s requests, Democrats end up with a deficit of almost $600 billion in 2014.

In this context, the vote on final passage was staged to follow the defeat of three competing proposals on the left and right that dramatized the huge political divide still over how to cope with this sea of red ink.
Liberal alternatives calling for dramatically less defense spending or the immediate repeal of Bush-era tax cuts for the wealthy were rejected by 3-1 margins.

Republicans fared little better, given the splits in their party.

A conservative alternative promising to balance the budget by 2019 failed by a vote of 322-111, with 65 Republicans in opposition. A second proposal by Wisconsin Rep. Paul Ryan, the ranking Republican on the House Budget Committee, failed 293-137, with 38 Republicans in opposition.

By comparison, Democrats held their own defections on final passage to 20, and the 233 votes for passage contrast with the past decade of often much closer House budget votes in past Congresses — under Democratic or Republican control.

Three House committees — Ways and Means, Energy and Commerce, and Education and Labor — will dominate the early stages of the health care debate.

Hearings can be expected this spring, said Rep. Pete Stark (D-Calif.), a lead player on Ways and Means who predicted that House action will heat up in June and July — well before the September deadline.

The task will be hugely difficult, even under the expedited procedures Democrats hope to invoke under the budget process. “We have to constantly make sure we don’t have that much daylight between Obama and ourselves,” Stark told POLITICO. “Or that much daylight between ourselves and the Senate.”
For Obama, the central dilemma is he is betting on deficits falling as the economy improves while pursuing a “pay-go” legislative strategy to finance his ambitious agenda.

That might work politically but for growing concern over the steady accumulation of debt under recent projections by the Congressional Budget Office. And pay-go could become a “no-go” bust if Democrats fail to come up with the new revenues or savings the president needs to cover his costs.

For example, Obama’s budget in February pledged to come up with nearly $634 billion in 10-year savings and revenues as a down payment toward health care reform. Nothing like that is spelled out in either the House or Senate resolutions, and on a 59-38 roll call vote Thursday, only one Democrat — Sen. Claire McCaskill (D-Mo.) — supported an amendment asking higher-income Medicare beneficaries to pay more for their prescription drugs, a reform backed by Obama.

“The health care tooth fairy isn’t going to put the money under our pillow,” Stark said.

In the case of agriculture, the president hurt himself strategically by coming forward with what the administration now admits was a poorly conceived plan to limit subsidies for farm households with gross sales of about $500,000 a year. Critics argued that this would affect even moderate-sized Midwest producers, and to help preserve rural support, the House resolution leaves the farm program intact, with none of the changes proposed by the White House.

Obama met with House Agriculture Committee Chairman Collin Peterson at the White House last Friday. The Minnesota Democrat had opposed the president’s stimulus bill in February but backed the budget despite continued anxiety over the projected deficits.

The White House and allies in the farm community were worried “we were getting off crosswise with the president and agriculture, and that would be a problem long-term if we got off on the wrong foot,” Peterson told POLITICO. “The president got to understand where I was coming from, got to know me.”

“The only thing I can justify out of this is they’re being honest,” Peterson said of the high deficits. “When I go home, I’m going to catch hell about this. But we’ve been asking for an honest budget, and I didn’t vote for most of this stuff that created this deficit.”