Assuming Tax Cuts Go Away Is A Key To House Plan For Boosting Domestic Spending

Wednesday, March 21st 2007, 7:39 am

By: News On 6

WASHINGTON (AP) _ A key House panel Wednesday began debating a Democratic budget plan to boost spending for domestic programs while assuming that a variety of popular tax cuts expire at the end of the decade.

The House Budget Committee took up the $2.9 trillion plan, which envisions big increases for homeland security, veterans health care and aid to local schools. A late-night vote was expected.

The House budget plan, like a companion version before the full Senate, promises a federal surplus in five years _ if President Bush's tax cuts indeed disappear and, as a result, more revenue flows into the federal treasury.

Republicans blasted the Democratic budget for its hefty spending increases and its assumption that lower taxes on income, married couples, inheritances and investments will expire at the end of 2010 as current law states.

``The best way to balance the budget is to control spending, not raise taxes,'' said top panel Republican Paul Ryan of Wisconsin.

Budget Committee Chairman John Spratt Jr., D-S.C., said decisions on the tax cuts, passed at the urging of President Bush in 2001 and 2003, should be made closer to their expiration date.

Meanwhile, Democrats in the Senate braced for difficult test votes on taxes as their companion budget plan faced its first full day of debate.

Senate Finance Committee Chairman Max Baucus, D-Mont., worked behind the scenes to fashion an amendment designed to preserve some of the Bush tax cuts aimed at the middle class. The amendment was pointed at shoring up moderate Democrats' support for the pending budget plan.

Republicans said they would press for votes on tax cuts expiring at the end of 2010, such as extending the $1,000 per child tax credit, which promise to be difficult votes for those same Democrats, including Mary Landrieu of Louisiana and Ben Nelson of Nebraska.

The shaky margin of control of the Senate was on display Tuesday night when Budget Committee Chairman Kent Conrad, D-N.D., said Democrats would not try to defeat a bid by John Cornyn, R-Texas, to require 60 votes in the 100-member Senate to pass increases in tax rates.

Despite much debate over taxes, the immediate impact of the companion $2.9 trillion House and Senate budget blueprint for next year is to award sizable increases to domestic agencies for the portion of their budgets passed each year by Congress.

The Senate Budget plan would give such programs an $18 billion increase, about 4 percent. At the urging of Rep. David Obey, D-Wis., House Budget Committee Democrats were poised to award domestic agencies with a $23 billion increase.

Democrats opted to put off politically painful decisions on shoring up the finances of Medicare and Social Security.

The measure is largely a response to Democratic complaints that Bush has shortchanged programs funded each year by appropriations bills _ including education, health research and grants to local governments _ while awarding expensive tax cuts tilted toward affluent, GOP-leaning constituencies.

Congress' annual debate on the budget is guided by an arcane process in which a nonbinding congressional budget resolution sets the stage for subsequent bills affecting taxes and benefit programs such as Medicare, as well as the annual appropriations bills.

In many years, Congress opts to punt on difficult budget issues issues and simply focus on the 12 annual bills funding the budgets of Cabinet agencies such as Defense, Education and Agriculture. This year is likely to be such a stand-pat year.

At the same time, Democrats are putting difficult procedural hurdles in front of attempts to cut taxes or increase spending on federal benefit programs such as farm subsidies and Medicare.

Democrats are restoring so-called pay-as-you-go rules requiring tax cuts or new spending on benefit programs such as Medicare to be ``paid for'' with new taxes or spending cuts elsewhere in the budget.

Tests loom later this year as Congress advances legislation to increase health insurance coverage for poor children, forestall Medicare cuts and fix the alternative minimum tax to spare almost 20 million taxpayers from unexpected tax increases.